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The state of retiring and retired women

As we celebrate the accomplishments and contributions of American women during Women's History Month, let’s also take a moment to reflect on their retirement status.

Updated on April 1, 2024.

Women's History Month is a time to recognize and celebrate the contributions of women in American history. 

It's also a chance to honor women who have paved the way for gender equity. I’ve written about women’s issues and notable women in the history of federal retirement in my column in years past. You might want to read about the four women who shaped modern retirement, including Frances Perkins, Ida Mae Fuller, Betty Villemarette, and Millie Parsons. Or you may want to review some interesting statistics from 2012 that explored why women should consider they’re likely to live longer and have lower retirement income than men when planning for retirement.   

Today, I thought we could look at the status of retiring and retired women compared to their male counterparts. Jack Caporal, lead researcher for the Motley Fool, recently shared the following statistics from the Census Bureau and Bureau of Labor Statistics about men and women who live alone:  

  • Retirement-age men have a median income of $31,220 compared to women, who bring in $27,350. 
  • On average, men 65 and older earn $50,490 per year compared to $40,830 for women. 

To better understand how women prepare for and live in retirement, the National Council on Aging conducted a survey in 2022 of Americans ages 50 and older and found that women reported retiring, on average, at age 64. 

According to the Office of Personnel Management, in 2022, 45% of the immediate optional retirements were women and the average age at retirement was 63.3. Half of retired women expect to live 21 or more years in retirement, which is consistent with data from the Labor Department. 

The types of concerns women have for retirement are similar whether they are retired or preparing for retirement. The size of those concerns is different, however, with women who are working or unemployed being more concerned than retired women primarily about the adequacy of their retirement savings. 

Women’s top concerns include the increasing cost of health care, being able to afford long-term care, caregiving needs they may have, and outliving assets and savings. This is consistent with a recent study that finds large swaths of Americans have retirement concerns and are pessimistic about their ability to be financially secure in retirement. The NCOA study found that women who are retired and women who are preparing for retirement are significantly more concerned than men with outliving their assets and savings, their own caregiving needs, and being able to cover the cost of an emergency expense requiring $2,000. 

What can be done for federally employed women to catch up and have a financially comfortable life after retirement? 

  • Saving and investing aggressively in the TSP.  This means: 
  • Striving to increase the percentage of income invested each time there is a salary increase.  Five percent should be the minimum so that the full agency match is added to your account. The 2024 annual elective deferral limit is $23,000 and the catch-up contribution limit is $7,500.  If you are turning 50 in 2024 or older than 50, you may make catch-up contributions. 
  • Learn how to invest for the long-term. Marie Curie said, “Nothing in life is to be feared, it is only to be understood. Now is the time to understand more, so that we may fear less. Be less curious about people and more curious about ideas.” One way to begin educating yourself on how to invest for retirement is by checking out the TSP website to learn more about investing strategies. The G Fund isn’t necessarily “safe” but it may never have a negative return. There’s always risk associated with investing. Creating an investment strategy should be based on your risk tolerance and your time horizon.  
  • Delaying filing for Social Security to receive a higher monthly benefit for the rest of your life. This can create a hedge against the risk of longevity.  Social Security and your federal CSRS or FERS retirement benefits are payable for as long as you live. 
  • Learn how much Social Security benefits will increase between ages 62 and 70.   
  • Plan on working part-time in retirement which will make it easier to delay Social Security and delay distributions from your TSP account to allow for more growth. 
  • Read about the “snowball effect” of investing. 
  • Even better, how about owning a business in retirement or sharing your experience and knowledge by becoming a consultant. 
  • According to the Justice Department, be aware of post-retirement employment restrictions. These restrictions particularly apply to activities that involve appearing before or communicating with federal agencies or courts after the former federal employee has left the government.   
  • Maintaining an income property in retirement. Here are five key takeaways from Investopedia for real estate investing for retirement income: 
  • Rental real estate can be a good source of retirement income. 
  • The relative inefficiency of the real estate market can produce bargains that offer strong returns. 
  • If you need to borrow to buy a rental property, do so before you retire. 
  • Choosing a good location is more important than finding the cheapest property. 
  • You should look to earn about 8% per year on your investment, after costs. 
  • Monetizing one's home in retirement (such as renting out space in a retiree-occupied home). 

CSRS and FERS retirement benefits along with Social Security benefits receive annual cost-of-living adjustments which will help your retirement income keep pace with increasing prices. For most FERS retirees, the FERS Basic Retirement Benefit doesn’t receive any cost-of-living adjustments until after reaching age 62. Rapid inflation from 2021 to 2023 has made it harder to retire on a fixed income. Perhaps working a little longer or considering a phased retirement may help increase your cash flow in retirement.  

Correction: An earlier version of this story incorrectly stated that the 2024 annual elective deferral limit was $30,000. The 2024 annual elective deferral limit is $23,000.