Why women face a retirement crisis

By Liz Pulliam Weston

We're living longer. Isn't that great? Then why are retirement experts so worried?

Perhaps because longer lives translate into longer retirements, and we're not doing a great job of saving enough money to last those extended lifetimes.

The issue is important for men, but it's critical for women. Among the reasons:

We live longer. The average life expectancy for a newborn girl in the U.S. is now a hair over 80 (80.4, to be exact), according to the Centers for Disease Control, which tracks these things. For baby boys, it's 75.2, or about five years less.

More to the point, the time women spend in retirement is longer. At age 65, a woman's life expectancy is another 20 years. A man's is 17.1.

But you shouldn't expect the lights to go out on your 85th birthday. Demographers predict a lot more of us who are alive today will survive into our 90s or even later. (If you're curious about your own life expectancy, check out our calculator.) Given that the median retirement age is 61 for women, many of us should be planning on a 30-year retirement -- or even longer.

We're more likely to suffer job interruptions and other income setbacks. Fewer working years means less opportunity to save for retirement and build Social Security benefits.

It's not just that we take time off to have and raise kids. We're also more likely to interrupt our work lives to care for sick parents or other relatives. Seven out of 10 unpaid caregivers are women, according to AARP, and more than 50% of caregivers make changes at work to accommodate their patients' needs. Those accommodations may include working different hours, working fewer hours or taking unpaid leaves of absence. It's hard to vie for promotions and income-boosting overtime when you need to get home to bathe and feed your ailing mother.

We earn less. Yes, the gap is shrinking, but the median income for full-time working women in 2006 was $31,200, compared to $38,636 for men. Average Social Security checks for men and women show the gap in working years and income: Men got $1,148 a month in December 2006. Women got $867.

We're probably going to die alone. Sorry, but that's the grim reality. Those of us who don't divorce are still likely to outlive our husbands. If he's substantially older than you, you could spend literally decades as a widow. You're going to need to know how to manage your money and to make sure you have enough to get you to the finish line.

We're much more likely to retire into poverty. Women overall are 71% more likely than men to live below the poverty line in retirement. When you compare unmarried women (divorced, widowed, never married) to married couples, the statistics are more shocking: Single women are four times more likely than couples to live in poverty.

We're probably not saving enough -- when we're saving at all. Survey after survey shows us lagging behind men in saving for retirement. We're less likely to be saving currently (53% of us compared to 62% of men, in the most recent study by the Employee Benefit Research Institute), less likely to be participants in a 401(k) or other retirement workplace plan (37%, compared to 41%) or to have an IRA or other retirement account outside work (37%, compared to 46%).

How much should we be saving?

Figuring how much we really need to be saving can be a daunting task. You can use MSN Money's retirement income calculator for an estimate.

Or you can use the chart on the next page, created with the help of T. Rowe Price number crunchers.

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