The wage gap has become a frequent topic in the national conversation. Perspectives and opinions vary about the causes, but one undeniable effect is financial insecurity in retirement.
The most significant financial threat to women is the risk of living in poverty in old age. Consider the following facts from the National Institute on Retirement Research (NIRS):
- Retirement income from traditional pensions and 401(k)s is estimated to be 25 percent less for women than for men.
- After age 65, women are 80 percent more likely to live in poverty than men.
- Women in their mid-to late 70s (75 – 79) are three times more likely to have retirement income fall below the poverty line.
There are many reasons that contribute to women falling short in retirement. For example:
- Females often spend less time in the workforce, impacting both Social Security and retirement plan contributions.
- Over the total working career, women’s accumulated earnings are often less than their male counterparts.
- The average lifespan of 81.2 years is almost five years longer than for males (76.3 years), requiring what begins as a smaller retirement nest egg to last even longer.
Marital status is also a contributing factor. While married women often benefit from a larger Social Security benefit based on their spouse’s benefit, divorced and never-married women are particularly vulnerable to the threat of poverty in retirement. For divorced women (married less than 10 years) and women who never-married, the spousal safety net is not available. One-third of female Baby Boomers fall in to this category.
As a financial professional, you can help your female clients understand and address these economic realities. Individual disability insurance is an example. In addition to accumulating fewer retirement assets, women are more likely to become disabled during their working years. Those who are disabled three months, are 38 percent more likely to be disabled for five years.
Protecting income with disability insurance offers financial stability during working years. Retirement plan disability insurance, which makes contributions to a retirement account during a period of disability, can contribute to your clients’ financial security in retirement.
Three Reasons Women Need Disability Insurance examines these and other reasons disability insurance can be considered essential coverage for working women.
Your DIS representative will share expertise in all our DI products and offer helpful suggestions to simplify underwriting. Just let us know what we can do to help you make the sale. Call DIS, we are your partner for disability insurance.