Senators Collins, Casey Lead Hearing to Examine New Report on Barriers Women Face to Retirement Security
Click HERE to read Senator Collins’ opening statement
Click HERE to read Senator Casey’s opening statement
Washington, D.C. — This morning, U.S. Senators Susan Collins and Bob Casey, the Chairman and Ranking Member of the Aging Committee, held a hearing titled, “Women and Retirement: Unique Challenges and Opportunities to Pave a Brighter Future.”
According to the non-partisan Center for Retirement Research, there is an estimated $7 trillion gap between what Americans are projected to have saved for retirement and what they are projected to need to maintain their standard of living. On average, women face a larger retirement savings gap than men and experience higher poverty rates at older ages.
Members of the Committee examined the findings from a 2020 Government Accountability Office (GAO) report—requested by Senators Collins and Casey—that analyzed the unique hurdles women face as they seek to prepare for and maintain a secure retirement. The hearing also focused on what steps can be taken to address the retirement security challenges women face.
“The GAO report featured at today’s hearing includes voices of women across the country sharing their stories. The women tell us about their struggles, including navigating rising costs of prescription drugs, housing, and other necessities, and how limited opportunities for financial education contributed to these challenges,” said Senator Collins. “Over the years, this Committee has focused on improving retirement security for older Americans today and for generations to come. Though we have made significant strides, we must continue to work together to address the unique challenges women face when saving for retirement.”
“As millions of women are experiencing job and income loss caused by the pandemic, it is more than important than ever to strengthen our retirement system so that women are not at risk of falling into poverty in their golden years,” said Senator Casey. The GAO report highlights what we already know—that lower pay, more time spent out of the workforce caring for others and longer life expectancy all make it more difficult for women to save and result in women being more likely to fall into poverty in old age. To ensure that all women are able to achieve financial security in retirement, we must close the gender pay gap, strengthen Social Security benefits, create permanent paid family leave and secure workers’ hard-earned pensions. Legislation, including my bill the SWIFT Act, has been introduced to address these needs. We must pass these bills without further delay.”
The Committee heard testimony from Comptroller General Gene L. Dodaro, the head of the GAO, who discussed the substantial damage the COVID-19 pandemic has caused to the global economy, and how this will likely harm the retirement security of future retirees. Comptroller General Dodaro also provided a summary of the July 2020 GAO report, which includes the views of older women expressed in 14 focus groups and examines data related to financial security of older women.
The GAO has found that women are overrepresented in low-wage professions and are more likely than men to take time away from work to raise children or care for a child or spouse, which has implications for retirement savings, including Social Security benefits, pensions, and defined contribution plan savings. Women also have higher average life expectancy, resulting in higher expected lifetime health care costs and a greater risk of outliving retirement savings. A woman born in 2020 who reaches age 65 can expect to live two years longer, on average, than a man born in the same year.
In all of the focus groups, women described some level of anxiety about their retirement security. Participants identified several barriers to achieving retirement security, including divorce, widowhood, pay inequality, and caregiving responsibilities. In discussing other hindrances to retirement security, they highlighted the importance of making good financial decisions and saving, particularly beginning at younger ages.
As the women participating in GAO’s focus groups noted, a lack of personal financial education about savings, investing, enrolling in Medicare, and claiming Social Security can hinder retirement security. In 2019, Senators Collins and Casey held a hearing on the financial security of seniors in retirement and in 2018 held a hearing on the critical decisions seniors face when they turn 65, including planning to maximize Social Security benefits. Additionally, the 2020 reauthorization of the Older Americans Act, which Senators Collins and Casey authored, includes a provision requiring the continued operations of the National Resource Center for Women and Retirement. This center provides basic financial management, retirement planning, and other educational tools that promote women’s financial literacy.