The retirement outlook for both men and women in the United States has changed significantly in the last 30 years. Like many industrialized countries, the United States is undergoing a significant demographic shift toward an aging population and is experiencing the increased pressures on the social insurance, medical, and private pension systems that this shift creates. While life expectancy in the United States has steadily increased over the last 50 years, birthrates have declined, and both have led to rapid growth in the proportion of the population comprised of elderly people: in 1950, those aged 65 or older made up 8 percent of the population; in 2000, this proportion rose to 12 percent and is projected to rise to almost 20 percent by 2030. Also, between 1940 and 1980, women’s life expectancy generally increased faster than men’s. During the same time period, the difference in life expectancy at age 65 for women and men grew from 1.5 years in 1940 to 4.4 years in 1980. (See fig. 1.) The difference in men’s and women’s longevity has decreased over the past 25 years, and that difference is expected to remain stable throughout much of the 21st century. Nevertheless, the ratio of elderly women to elderly men increased substantially in the post-World War II era, and elderly women will continue to outnumber elderly men both in numbers and as a percent of the population for the foreseeable future. (See fig. 2.) As a result of these trends, women can expect on average to spend more years in retirement than men. Traditionally, the financial resources that provide retirement security have been characterized as a three-legged stool: Social Security, pensions, and savings, although increasingly, earnings are also a significant source of income for the elderly. Overall, women have been more likely than men to rely on Social Security to finance their retirement. Moreover, some aspects of the Social Security system particularly benefit women. For instance, because women tend to have lower lifetime taxable earnings than men, they benefit from the Social Security system’s progressive benefit formula, which replaces a larger portion of lifetime earnings for people with low earnings than for people with high earnings. In addition, Social Security is designed specifically to accommodate both low- or non-earning spouses, often women, by providing them with a dependent benefit based upon their spouses’ earnings. Social Security was created based upon the model of a single-earner married couple family structure, and while many women still never enter the paid workforce or choose to reduce their workforce participation, at least in part to care for children or other family members, the single-earner family model no longer describes the typical American household. Nevertheless, this structure has been and continues to be extremely beneficial to some women. However, Social Security faces a long-term financing shortfall resulting largely from longer life spans and lower birthrates. According to 2007 Social Security projections, absent policy changes, Social Security tax revenue is expected to fall short of benefit payments for the first time in 2017; by 2041 the system may have inadequate resources to pay full benefits. As a result, in the future, Social Security’s role could change. Reductions in scheduled benefits and/or increases in program revenues will be needed to restore the long-term solvency and sustainability of the program. Within the program’s current structure, possible benefit changes might include changes to the benefit formula or reductions in cost-of-living increases, among other options; revenue increases might include increases in payroll taxes or transfers from the Treasury’s general fund. In addition, many proposals have been put forth over the past several decades to address the adequacy of Social Security benefits for different kinds of workers and their families. These proposals often address the needs of spouses, survivors, and low earners as well as those with significant workforce interruptions. Additionally, many workers bear greater risk and responsibility for their retirement savings than in the past. About half of U.S. workers do not have a pension plan through their employer, and those who do are less likely than in the past to be covered by defined benefit (DB) plans. Among those who offer plans, employers have increasingly shifted from traditional DB to defined contribution (DC) plans, such as 401(k)s, which are based on contributions to and investment returns on individuals’ accounts. While private sector DB plans must offer a guaranteed lifetime income in the form of an annuity, DC plans more often provide the beneficiary with a lump sum as the only option. While individuals could take the proceeds of their lump sum and purchase an annuity, the cost of purchasing a private annuity may make this option unattractive to many households. In addition, the private equity market charges women a higher premium for a life annuity than it charges men of the same age, because on average women live longer than men. Personal savings have traditionally been an important source of retirement income. Unfortunately, despite the challenges facing both public and private benefit systems for the elderly, relatively few Americans are currently saving, and some research suggests that women have less in savings than men. According to some measures, America has the lowest overall saving rate of any major industrialized nation. The U.S personal saving rate as a percentage of disposable personal income has recently reached levels not seen since the Great Depression, falling below 1 percent in 2005 and 2006. A variety of proposals seeking to encourage more individuals to save have been introduced in the past several years. Many of these proposals target low- and moderate-income workers who are least likely to have access to employer-sponsored pension plans. Some of these proposals create added incentives or ease access for individuals to save through existing savings vehicles, such as 401(k) plans or individual retirement accounts (IRA). Other plans would create new vehicles for savings, such as 401(k) type plans for those not currently covered by a plan. One mechanism that already exists to encourage individuals to save is the so-called spousal IRA offered to non-earning spouses, who are most often women, as a way to build retirement income. A spousal IRA, allows non-earning spouses to accumulate retirement savings in their own retirement accounts. Finally, health care coverage and rising health costs have added to the financial burden for retirees. Retired Americans often rely on employer- sponsored health benefits to provide health coverage until they become eligible for Medicare or to supplement their Medicare coverage. In 2005 about 37 percent of retirees were covered by such plans. However, retirees are paying more for these benefits, and the number of private employers offering them has declined considerably. The rate of growth of health care costs has generally outpaced the rate of U.S. economic growth, and this trend is likely to continue, jeopardizing the availability of employer-sponsored insurance for many. Rapidly rising health care costs may be particularly burdensome for retirees with limited financial resources. Additionally, the odds of having a disability or chronic illness increase with age; since, on average, women live longer, dealing with the cost of declining health may be a particular concern for women. Generally, women have less retirement income than men, largely because, on average, women have lower labor force attachment and lower earnings than men. While about 90 percent of men and women aged 65 and older receive Social Security benefits, fewer women than men have income from most other major sources of retirement income, and they receive less than men from those sources, according to a Congressional Research Service analysis of Census Bureau data. Additionally, women aged 65 and older have higher rates of poverty than men of the same age. While women’s labor force participation has increased substantially in the last half century, it has flattened out in recent years and remains more intermittent than men’s. Women also tend to earn less than men during their working years. While Social Security provides retirement income to almost 90 percent of all elderly people, a smaller percentage of women than men age 65 and older have additional income from pensions, assets—such as interest or dividends from lifetime savings, or earnings, according to the Congressional Research Service analysis of Census Bureau data. For example, in 2004, the percentage of men with income from pensions was almost twice that of women and 44 percent more men than women had wage and salary income. (See fig. 3.) Moreover, women’s median incomes from each of the various retirement sources are lower than men’s. As shown in figure 4, men’s median annual Social Security income was $12,583 in 2004, while women’s was $8,799. Nevertheless, Social Security is an important financial resource for women, many of whom receive spousal, divorced spousal, or survivor benefits. According to the Social Security Administration (SSA), while Social Security is the largest single source of income for most of the elderly population age 65 and older, it represents 53 percent of total income for elderly unmarried women—including divorced, widowed, and never married women, compared to 38 percent for unmarried men. Moreover, Social Security was nearly the only source of income for close to half of all elderly unmarried women who received it in 2004, compared to a little more than a third of elderly unmarried men. Importantly, Social Security can become a growing fraction of total retirement income over time since it is indexed to offset the effects of inflation. In contrast, private pensions and income from assets are rarely indexed. Unlike Social Security, pension income may end upon the death of the spouse if the retired worker elects to receive a single life annuity, in which payments cease at the time of the worker’s death. The difference between men’s and women’s pension income is larger than for Social Security. In 2004, men’s median pension income was nearly twice women’s, $12,000 and $6,141, respectively. Asset income is relatively low for both women and men compared to Social Security and pensions. Nevertheless, women’s median asset income was $750, while men’s was slightly higher at $964.