In its new report on the future of retirement, the Urban Institute says women’s Social Security benefits are growing while men’s benefits stagnate.
This is a reflection of the fact that women are working more and getting paid more.
As women work more and earn more per hour, their lifetime earnings are increasing rapidly. Compared with pre-boomer women’s take-homes, median lifetime earnings could be 88% higher for Gen X women and 129% higher for Xennial women.
At the same time, men’s lifetime earnings are not keeping pace with inflation. Projected median lifetime earnings are 3% lower for Xennial men than for pre-boomer men.” Still, despite the gains that women are making, the gender gap in earnings persists. Xennial median lifetime earnings will be 40% higher for men than for women.
The Urban Institute has ways to help those people still falling short in retirement savings. One recommendation is to replace tax deductions, which disproportionately benefit high-income families, with tax credits, which would aid those most in need and help reduce the retirement preparedness gap.
Those nearing retirement age who consider working longer could improve their long-term security. Policy makers and employers should also promote retraining and flexible work schedules that can accommodate their needs.
The Institute predicts that as long as policy makers make no cuts in Social Security benefits, retirement incomes will continue to increase over the next four decades. Median per capita after-tax family income at age 70 will be 17% higher for Gen Xers than for the pre-boomers born from 1936 to 1945, and median retirement income for Xennials will be 24% higher than the median for pre-boomers.
Social Security remains a major question mark. Should benefits be cut beginning in 2035, some 40% of Gen Xers as well as Xennials will be unable to replace some 75% of their preretirement earnings at age 70.
For more information, please read:
Women Beating Men In The Social Security Benefit Battle | Financial Advisor Magazine