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Women Pathfinders of the '70s, Falling in a Pension Gap

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Sunday, April 20, 2008; Page F01

Women on the leading edge of the baby-boom generation are also at the forefront of other trends -- ones that may work to their detriment in retirement.

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These women were knocking bars off the doors of employers in the 1960s and 1970s, applying for jobs that would have been denied them in the past. But once hired, many found that the struggle had just begun. They often were massively underpaid when compared with their male colleagues. And they discovered ceilings that could be as hard to break through as doors.

At the same time, they were part of a wave of social change. Marriages, if entered into at all, were less likely to be lifelong commitments than their parents' had been.

Now they are headed toward retirement. And I worry that they may be caught in a generational crevice, with their retirement made less secure by their early difficulties finding work, the lower wages they endured in the days when equal work seldom meant equal pay, and by changes in the pension system.

Susan Williams is one of these leading-edge baby boomers, and she is facing a retirement much different from what she envisioned. At 62, she recently quit her temporary job and applied for Social Security, convinced that working in an unsatisfying job wasn't going to significantly improve her retirement. "I decided I'd rather be broke than dead," she said.

She owns her home and has no dependents, not even a gas-guzzling car, so she's doing all right in the short term, though at some point she expects she will have to take on a part-time job.

On the other hand, she has no pension or retirement savings, having served very briefly in the Army and then worked in a succession of administrative jobs. Two marriages ended in divorce.

Where had she expected to be at this stage in her life? "I thought it would be either me and my grand career and a pension at the other end, or maybe teaching, or I would be married and my husband would have had a pension," she said.

Williams was talking about a traditional pension that pays lifelong benefits. That type of pension has been largely replaced by retirement savings plans such as 401(k)s and IRAs, which put more responsibility on individuals to save and invest.

Both men and women in their 50s and 60s got caught in the shift from one kind of pension plan to another. There was a gap between the time defined-benefit pensions started disappearing and widespread adoption of defined-contribution pensions. I often hear from readers who say that the employers they worked for did not offer a retirement savings plan until they were in their late 40s. That means they missed the benefit of beginning to save early for retirement and the years of compound growth.

In the past, when traditional pensions were more widespread, men were more likely to be covered by them, since they were often offered at unionized, industrial workplaces. But they were common for government workers, too, including teachers, and many women received traditional pension benefits as survivors of their husbands.

A recent report by the Retirement Security Project, sponsored by the Pew Charitable Trusts in partnership with Georgetown University's Public Policy Institute and the Brookings Institution, argues that their disappearance "hurts women more than men because women tend to live longer and benefit more from the protection that guaranteed lifetime income provides against outliving their resources."


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