The Average American Woman Gets This Much Less From Social Security Than Men

Image: AARP via Facebook.

Social Security is a cornerstone of retirement planning, with 59 million Americans currently receiving benefits from the program. Yet there is a clear Social Security gender gap, with the average woman getting a much smaller monthly benefit from the program than her male counterpart. Although this disparity isn't new, some policymakers are troubled by the fact that the gap hasn't yet shown signs of disappearing anytime soon. Let's take a closer look at the latest data from the Social Security Administration to find out just how big a gender gap Social Security has right now and what's behind it.

The hard numbersAccording to the SSA's Annual Statistical Supplement, more than 48 million recipients got Social Security benefits from the Old Age and Survivors Insurance or OASI side of the program as of December 2014. When you look at the totals for men and women, the gender gap between average benefits for the two groups is quite wide. Roughly 21 million men received an average of $1,436 per month from Social Security OASI benefits. By contrast, nearly 27 million women received Social Security OASI benefits, with the average coming in at $1,121 per month -- $315 less, meaning that women got just 78% of the benefits that men received on average.

Source: SSA.

Looking more closely at the numbers, the biggest gaps were found on the retirement side of the Social Security program. In total, women's retirement benefits averaged $1,111, or just over three-quarters of the average for men's retirement benefits. Among the 39 million Americans receiving benefits based on their own work histories, men averaged $1,488 per month, while women took home about $1,167 per month. The numbers of men and women receiving their own retirement benefits was roughly equally divided.

By contrast, there were some areas in which women's benefits were larger than men's on average. Women's spousal benefits tended to be larger, with the average woman receiving $680 in monthly spousal benefits compared to just $520 per month for men. There's also a huge gap in the number of men and women getting spousal benefits, with the SSA estimating more than 2.2 million spouses took spousal benefits compared to fewer than 100,000 men.

Similarly, survivor benefits were skewed more toward women. The average woman got $1,165 in monthly survivor benefits as of December 2014, compared to $848 for the average man. Here too, the raw numbers of men and women getting survivor benefits were out of balance, with more than 5 million women recipients compared to just 1.1 million men.

Source: SSA.

What's behind the gender gap?It's easy to dismiss Social Security's gender gap as being a symptom of the broader gap in lifetime pay between men and women. Because Social Security benefits are based on average earnings, it makes sense that benefits would be smaller for those whose average earnings over the course of their careers were less.

However, the SSA data reveals some other factors at play. First, despite the fact that their longer life expectancies would ordinarily make claiming benefits later a smarter move, more than three quarters of all retired women received less than their full retirement benefit. Fully 14.5 million women accepted reduced benefits in exchange for early retirement, and their average monthly payment was just $1,102. By contrast, the 4.9 million women who waited until full retirement age earned an average of $1,363 per month, which was much closer to the overall average for the Social Security program as a whole.

Also, the SSA data suggests that when you take reductions for early retirement into account, the gender gap narrows as Social Security recipients get older. From age 70 to 74, the gap is at its widest, with a difference of more than $340 per month on average. Yet the gap narrows to $150 in one's early 80s and to just $75 in the late 80s, and women aged 90 to 94 actually have a higher average benefit than men.

Efforts to eliminate the Social Security gender gap have focused on two areas. First, by eliminating difference in gender pay during women's careers, the Social Security benefits formula will automatically start to close the gender gap in monthly retirement income. In addition, though, some lawmakers have looked at expanding benefits for low- and middle-income Social Security recipients, with women potentially benefiting more than men from most proposed changes.

Social Security has a gender gap, and it's unlikely to disappear soon. Nevertheless, in planning for your own retirement, it's critical for women and men alike to know the steps they can take to make the most of the Social Security benefits they've earned over their lifetimes.

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