Retired Americans who worked all their life while paying into Social Security may assume that both men and women are entitled to the same amount. But that belief doesn’t appear to align with reality, as according to recent studies, women may receive significantly less in Social Security benefits than their male counterparts. Looming benefit cuts could widen the gap even more.
How big is the Social Security gender gap?
Women receive $4,800 a year less than men in Social Security benefits on average, said AARP. The disparity is largely because women “still tend to earn less than men,” said CNBC. Over half of caregivers, 61%, are also women, said AARP, and as a result they are “more likely to take time out of the workforce or reduce their working hours to make time for those caregiving responsibilities,” said CNBC. Both of these factors “tend to leave women with less retirement savings.”
Other data from the personal finance website FinanceBuzz claims that there is an even larger gap in Social Security pay. According to FinanceBuzz’s research, women “receive an average of $1,760 per month in Social Security, 19.9% less than the $2,198 men receive, a gap of $438 every month or $5,254 per year.” Women make up about 55% of all Social Security recipients, but the “total monthly payout to men is higher ($54.4 million vs. $53.5 million), meaning women collect far less per person.”
How does this impact retirees?
While the pay gap has been improving in recent years, the “median earnings for American women working full-time are only 83% of those of their male counterparts,” and the financial consequences may be “felt long after women have retired from the workforce,” said FinanceBuzz. The “result is a retirement income system that faithfully mirrors the inequalities of working life.”
The ongoing disparity also means that Social Security cuts, which are slated to occur in 2032, would “more deeply impact women,” said USA Today. Elderly women are “far more likely than men to rely on Social Security to meet their basic needs,” Courtney Anderson, a social insurance legal fellow at the National Women’s Law Center, said to the outlet. Her organization is pushing for policymakers to “strengthen and expand — not weaken and cut — Social Security.”
These cuts would come at a time when women, especially elderly women, are already more likely to live in poverty than men. Between 2023 and 2024, the national poverty rate “significantly increased from 15.0% to 16.2% for older women while remaining unchanged for older men,” according to a National Women’s Law Center report. But these rates “would be far higher without Social Security, which has protected millions of older women from falling into poverty.”
Some “potential solutions are in the mix,” though they would require congressional intervention, said Fast Company. One recent proposal from the Committee for a Responsible Federal Budget “would cap Social Security payments to $100,000 per couple, reducing the amount paid out to wealthy retirees who rely on the monthly benefits the least.”
Sen. Elizabeth Warren (D-Mass.) and Sen. Bernie Moreno (R-Ohio) have also “floated the idea of lifting the payroll tax cap to make the Social Security program’s math work once again,” said Fast Company. This plan would “replenish the Social Security trust by collecting more for Social Security withholding” above the current income cap — a “limit that only benefits the highest earners.”