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Data & Research January 23, 2019
Among Gen Xers, Females Face Greater Retirement Uncertainty
According to an analysis from the Employee Benefit Research Institute (EBRI), single Gen X females are the only cohort with at least 50% of households having a deficit.
Reported by Rebecca Moore
A cut of data about Generation X from the Employee Benefit Research Institute’s (EBRI)’s Retirement Security Projection Model (RSPM), which can assess the size of households’ retirement deficit by modeling Retirement Savings Shortfalls (RSS), found the retirement deficit—or additional savings required to meet basic needs in retirement—is higher for both widows and single females than for widowers and single males.
The average RSS is $18,476 per individual for married households where the female dies first (widowers), the average RSS is $22,783 for married households where the male dies first (widows), the average RSS is $37,690 for single males, and the average RSS is $72,883 for single females.
According to the analysis, single Gen X females are the only cohort with at least 50% of households having a deficit. The median RSS for this group is $19,900, and 10% of single females have an RSS of at least $222,592.
Nearly half (48%) of single females at the lowest income quartile have at least a $100,000 RSS (connoting serious potential financial complications in retirement). This compares to one-third 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 versus 7% for single males, 4% for widows and 3% for widowers.
Defined contribution (DC) retirement plan eligibility helps with the shortfalls. Single females with no future eligibility in a DC plan have an average RSS of $97,325 versus the $24,486 average RSS of those with at least 21 to 30 years of future eligibility. The average RSS is $39,016 worse for single females than for single males with no future DC plan eligibility. The discrepancy in the average RSS between widows and widowers with no future DC plan eligibility is $6,529.
Auto portability—where a participant’s account from a former employer’s retirement plan would be automatically combined with their active account in a new employer’s plan—can also have a large impact, EBRI found. For those with 21 to 30 years of future DC eligibility, auto portability reduces the average RSS by 21% for single females to as much as 38% for widowers.
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