Women in Two-Income Households and Retirement Risk
Jun 11, 2019retirement readiness,nrri,retirement securitySA-Articles
Two isn’t always better than one, even when you have double the household income.
Many two-income households are not saving enough to cover both spouses in retirement.
A woman’s marital status may play a role in how well-prepared she is for retirement.
Married women in two-income households – more so than single women or married women in one-income households – are at the greatest risk of not being able to maintain their standard of living in retirement, according to the latest research from the Center for Retirement Research at Boston College (CRR).
Despite the fact that they have two incomes, 46% of women in two-income households are at risk of being unable to maintain their standard of living in retirement, vs. 32% of married women in one-income households and 39% of all single women, the CRR’s National Retirement Risk Index (NRRI) found.
Percentage of Women Ages 50-59 At Risk of Being Unable to Maintain their Pre-Retiree Standard of Living in Retirement
Percentage of Women Ages 50-59 Able to Maintain their Pre-Retiree Standard of Living
Married, one income
Married, two income
This counterintuitive finding is due largely to three factors, according to the CRR:
The progressive design of Social Security benefits
Inadequate saving in workplace retirement plans
Adverse impacts from divorce
Women of every marital status face significant challenges in achieving financial security in retirement. As Prudential’s previous report, Closing the Retirement Income Gender Gap, notes, women on average earn about 20% less than men, receive less in Social Security benefits, and save 32% less in retirement savings. Women also are more likely to have inconsistent work histories due to caregiving responsibilities, which can make it harder for them to save for retirement.
So why is it that two incomes don’t necessarily translate into long-term financial security?
They get used to living a two-income lifestyle.
They pay more in Social Security taxes and receive lower Social Security benefits per tax dollar paid.
And they save too little in workplace retirement plans.
It’s always been important for women to plan and save for retirement, but it’s even more true today, especially for women in two-income households. Fortunately, there are many steps women can take to put them further along the road to retirement security.
Assurance IQ, LLC a wholly-owned subsidiary of Prudential Financial, Inc. matches buyers with products such as life and health insurance and auto insurance, enabling them to make purchases online or through an agent. Neither Prudential Financial, Inc. nor Assurance IQ offers, underwrites, or administers health plans or health insurance policies.
LINK by Prudential is an umbrella marketing name for Prudential Customer Solutions LLC (“PCS”), Prudential Annuities Distributors, Inc. and various subsidiaries of The Prudential Insurance Company of America. Investment advisory products and services of LINK by Prudential are made available through PCS, an SEC registered investment adviser. PCS is not a licensed insurance agency or broker. Prudential LINK and LINK by Prudential occasionally may be referred to as LINK.
Insurance and/or annuities are issued by The Prudential Insurance Company of America, Pruco Life Insurance Company (except in NY and/or NJ), Pruco Life Insurance Company of New Jersey (in NY and/or NJ), and Prudential Annuities Life Assurance Corporation (PALAC). Each is a Prudential Financial company located in Newark, NJ (main office), except for PALAC which is located in Shelton, CT (main office), and each is solely responsible for its own financial condition and contractual obligations.
Variable annuities are distributed by Prudential Annuities Distributors, Inc., Shelton, CT.
Retirement products and services are provided by Prudential Retirement Insurance and Annuity Company, Hartford, CT, or its affiliates.
This web page is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. Clients seeking information regarding their particular investment needs should contact a financial professional. Prudential Financial, its affiliates, and their financial professionals do not render tax or legal advice. Please consult with your tax and legal advisors regarding your personal circumstances.
This website is for U.S. persons Opens in new window and may not be approved in all states. Information contained on this site does not and is not intended to constitute an advertisement, solicitation or offer for sale in any jurisdiction, outside the United States of America, where such use would be prohibited or otherwise regulated.
"Prudential Advisors" is a brand name of The Prudential Insurance Company of America and its subsidiaries.
Prudential, the Prudential logo, the Rock Symbol and Bring Your Challenges are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
Prudential Financial, Inc. of the United States is not affiliated with Prudential plc, which is headquartered in the United Kingdom.
Pruco Life Insurance Company, an Arizona company - California COA # 3637. The Prudential Insurance Company of America - California COA # 1179. Prudential Retirement Insurance and Annuity Company - California COA # 08003. The Prudential Life Insurance Company of America Newark, NJ.
Securities and Insurance Products:
Not Insured by FDIC or any Federal Government Agency | May Lose Value | Not a Deposit of or Guaranteed by the Bank or any Bank Affiliate.