Women in America Are Facing a Retirement Crisis. COVID-19 Is Accelerating It.

While the Biden administration and Congress debate the next COVID-19 relief package – something that is sorely needed to help end the pandemic and keep millions of Americans afloat – a longer-term economic disaster is on the horizon. Across the country, women of all ages are falling even further behind their male peers on the road to a secure retirement. This spells disaster for older women now and for generations of younger women in the years ahead.

An analysis by the National Women’s Law Center found that December’s loss of 140,000 jobs was felt almost exclusively by women. And AARP found that women accounted for all of the increase in unemployment among workers ages 55 and older. That’s right, ALL. This is on top of the estimated 2.2 million women who left the workforce entirely between February and December 2020.

In addition to making it hard, if not impossible, to pay the rent and put food on the table today, every month without a job chips away at the foundation of a woman’s financial future. No paycheck means no ability to save for retirement, as well as lower lifetime earnings. That translates eventually into lower Social Security benefits. Already, women account for 58 percent of Americans over 65 who are living in poverty — the pandemic is simply making a bad situation exponentially worse, especially for Black and Latina women who are overrepresented in hard-hit sectors like hospitality.

This vicious cycle isn’t new to the COVID era. And, on its own, it’s not unique to women. Job losses during the Great Recession disproportionately affected men in much the same way. What’s different is that women start out – and often remain – at an economic disadvantage throughout their adult lives.

When a woman in her 20s gets a job, she’s often earning less than her male counterparts, a pay gap that persists and compounds over time. Several years later, she starts a family, but because child care is so expensive, she cuts back her hours to care for her children. If and when she ramps back up, she is years behind her male colleagues in terms of earnings and cumulative savings. Then, just as she is reaching what should be her peak salary-wise, she turns down a promotion and scales back again – or leaves the workforce entirely – to care for her aging parents. Any efforts to return to full-time employment in her 50s or 60s are then often stymied by the double whammy of age and gender discrimination. Some may end up taking a part-time job or gig work for less pay and no benefits. Others may not go back to work at all.

One study estimates that a woman taking care of an aging parent could lose $120,000 in earnings if she cuts back on her working hours and $142,000 in wages if she stops working altogether. Either way, her Social Security benefits will be reduced. Pre-COVID, research showed that women earned up to $1 million less in cumulative wages and salary than men over the course of their careers, and collect $3,700 less annually in Social Security benefits.

Considering that women, on average, live longer than men and have higher health care costs in retirement, the numbers just don’t add up. In short, this is a recipe for economic disaster – and one that fully half of women ages 50 and up who are divorced, widowed or never married will shoulder alone.

Our elected leaders and members of the business community need to recognize these longstanding inequities and challenges in combination with the long-term repercussions of COVID job losses. That means dealing with gender pay equity, affordable child and elder care, paid leave and other workplace policies to make it easier for family caregivers to balance work and their responsibilities at home. It means tax credits to help defray out-of-pockets costs for caregiving expenses and expanded access to workplace retirement savings plans. And it means protecting and strengthening Social Security for current and future generations.

The ability to enjoy a financially secure retirement begins long before a person turns 65. This is a multifaceted, multigenerational problem – so it requires multifaceted, multigenerational solutions to improve the economic well-being of women of all ages. Doing so will go a long way toward shoring up millions of American families and our country’s overall economic health now and into the future.


Nancy LeaMond is the chief advocacy and engagement officer at AARP.

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