Skip to main content

You are here


EBRI: Single Women Face Significant Retirement Savings Shortfall

New research reveals dramatic retirement savings shortfalls among women of all cohorts, but particularly for single women, which could lead to serious financial complications in retirement.

In “How Retirement Readiness Varies by Gender and Family Status: A Retirement Savings Shortfall Assessment of Gen Xers,” the Employee Benefit Research Institute finds that the retirement deficit – viewed as the additional savings required to meet basic needs in retirement – is significantly higher for both widows and single females.

Given the increasing emphasis on the retirement income adequacy of widows and single women, EBRI developed a new module allowing the organization to look at scenarios of married households at retirement age when either the male or female dies first, going beyond previous analyses limited to single males, single females and married couples.

“By bifurcating married couples into two distinct groups – when the man dies first and when the woman dies first – the conclusions are even starker,” explains Jack VanDerhei, EBRI’s Director of Research and author of the issue brief.

These findings are particularly severe when households for which no shortfall is projected are excluded from the analysis. On average, the additional savings required vary from $18,476 (per individual) for married households where the female dies first and $22,783 for married households where the male dies first to $37,690 for single males and $72,883 for single females.

But looking only at those situations where shortfalls are projected, EBRI’s analysis finds that the values for Gen Xers vary from $76,896 (per individual) for married households where the male dies first and $82,937 for married households where the female dies first to $128,417 for single males and $131,674 for single females.

Single Female Shortfalls

And the findings don’t get any better for single females. Not only are they more likely to have retirement deficits, their retirement deficits are likely to be significantly larger than those of all other cohorts. According to the brief, single females are the only group with more than half of its population having retirement deficits, with 10% having shortfalls exceeding $223,000. The median retirement savings shortfall (RSS) for this group is $19,900.

What’s more, nearly half (48%) at the lowest income quartile have at least a $100,000 RSS, connoting serious potential financial complications in retirement, EBRI warns. This compares to a third (33%) of single males and 42% of widows. Even in the highest income quartile, 13% of single females have an RSS of at least $100,000, compared to 7% for single males, 4% for widows and 3% for widowers.

DC Plan Eligibility

So is there a solution? Not surprisingly, a lack of eligibility for participation in a DC plan significantly increases savings shortfalls, but future eligibility in DC plans can “dramatically reduce serious potential financial complications in retirement,” according to EBRI.

The deficit values for single females assumed to have no future eligibility in a DC plan is $97,325. However, that shortfall decreases substantially for those with 1 to 10 years of future eligibility, to $68,891, and even further to $48,990 for those with 11 to 20 years of future eligibility, VanDerhei explains.

And for those single female Gen Xers who have 21 to 30 years of future eligibility in a DC plan, their average shortfall at retirement is reduced to only $24,486.

When broken down by percentages, 42% of female households with no future DC plan eligibility have an estimated RSS of at least $100,000, compared with only 11% of those with 21 to 30 years of future eligibility, the brief shows.

Auto portability can also have a large impact, according to EBRI. “When we simulated the likely impact of a full auto portability scenario (starting in 2019), we found at least a double-digit percent reduction for all groups with future years of defined contribution plan eligibility, and for those with 21-30 years of eligibility, we found a 21% reduction in deficits for single females and a 31% reduction for widows,” VanDerhei notes.