Women in the “Peak 65” demographic, where an estimated 4.1 million U.S. adults will turn 65 in 2024 and will continue to until 2027, could be facing a grave financial divide.
Research from Alliance for Lifetime Income found that 51% of women in the “Peak 65” zone currently have less than $100,000 in retirement assets, with this percentage jumping to 67% for single women.
“The long-running effects of women earning less and saving less during their working years are now becoming magnified and felt by millions of Peak 65 women entering retirement,” said Jean Statler, CEO of the Alliance for Lifetime Income.
According to the report, the median retirement savings for Peak Boomer women is $185,000, versus $269,000 for Peak Boomer men, while 48% of male Peak Boomers have $99,000 in their defined contribution (DC) plan versus 41% of women with $60,000 in DC plan assets.
Regarding Social Security benefits, the average benefit for retired Peak Boomer women is $21,400, versus $28,400 for Peak Boomer men, according to the report. By 2030, Alliance for Lifetime Income estimates that 48,400 Peak Boomers with small assets and low income could qualify for Supplemental Security Income (SSI), which offers a maximum monthly benefit of $943 for an individual and $1,415 for a couple.
As a result, the findings go on to report that women are much likelier to express interest in guaranteed income solutions, as they turn to ways to protect and generate retirement income. Women are more likely than men to say such protection is key when planning for retirement (76%), and 92% say working with an advisor who can identify how to protect their assets is “very important,” as only 39% say they understand the role annuities play in a retirement plan.
The report underscores prior findings from Alliance for Lifetime Income’s Protected Retirement Income and Planning (PRIP) study. The 2023 report found that 61% of women believe owning a financial product could provide a regular amount of lifetime income, and 48% are extremely interested in owning an annuity that guarantees steady income.
“There’s a big disconnect between the four decades of saving that women know we have to do and using those accumulated assets to provide for the rest of our lives,” said Jean Chatzky, education fellow with the Alliance’s Retirement Income Institute, and CEO of HerMoney. “It’s time for planners, retirement plan providers, and other educators to make decumulation — making the money last — part of the conversation.”
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.