The future looks grim for people who rely on Social Security income in retirement. The program is barreling toward running out of funds by 2032 unless Congress intervenes, and women in particular stand to lose if that doesn’t happen.
Experts predict that the Old-Age and Survivors Insurance Trust Fund, better known as OASI, will be depleted in as little as six years—or seven if we’re lucky. In the U.S., 63 million Americans receive Social Security benefits through that trust, which workers pay into over the course of their lifetimes.
For older people who rely on Social Security income to pay for basic needs like food and housing, that shortfall stands to be catastrophic. Seniors will take a major hit to their finances across the board, but, as with so many aspects of American life, the pain won’t be distributed evenly.
The gender pay gap strikes again
Given their longer lifespans, women tap into Social Security for longer stretches of their lives. Women who reach 65 are expected to live another 23.9 years on average, compared with 21.4 years for their male counterparts. While women can expect to lean on Social Security benefits for longer, they’re also tapping into a smaller pool of cash.
Women still earn less than men, a phenomenon that shapes disparities in Social Security income dramatically. In 2019, the average annual Social Security benefit for women was $13,505—almost $4,000 less than the annual average of $17,374 for men. More recent data analyzed by personal finance website FinanceBuzz showed a worsening gender gap, with women receiving $5,254 less per year in Social Security benefits compared with men. That discrepancy would be even more pronounced, but many women receive Social Security connected to a higher-earning male spouse’s lifetime income.
The gender gap is not even across the country. In the state of Utah, men receive 27% more in Social Security benefits than women, getting an average of $2,400 monthly compared with just $1,751 for women. The gap is also above 25% in Louisiana, where women are paid only $1,552 monthly on average—the smallest Social Security benefit nationally and more than $200 under the national average for women. Even in Delaware, where women receive the highest average monthly benefit of $1,978, that amount still falls short of men by more than $400. In every single state, men receive more than $2,000 monthly on average, while women don’t crack that ceiling even once.
Because they rely on Social Security for a greater span of time and have less lifetime earnings to pad their savings, women are doubly vulnerable to a looming Social Security shortfall. “Political risks may vary in part because women generally have lower lifetime earnings and, for that reason, depend more than men on Social Security benefits in retirement,” a 2023 report from the Social Security Administration (SSA) stated. “Thus, the risk related to any future legislated changes in Social Security benefits may be greater for women than for men.”
Beyond baseline differences in income, women also take more time away from work to have children and to care for other family members. “Each year out of the workforce can count as a zero in the benefits calculation,” the FinanceBuzz report points out, observing that this effect can “compound over time,” creating a substantial loss in future Social Security income. Women also work more part-time jobs, which generate less wages and translate into lower benefit payments down the road.
Solving for solvency
There’s still time for lawmakers to mount an intervention. Without a plan in place to fix the insolvency crisis, everyone receiving Social Security benefits is facing an immediate 24% cut to their benefits—“deep, abrupt benefit cuts that would affect all beneficiaries, regardless of age or need,” according to a recent report from the Committee for a Responsible Federal Budget (CRFB).
Potential solutions are in the mix, although any fix to the financial safety net many Americans rely on will require strong bipartisan political will—something in short supply these days. One recent proposal from the CRFB 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.
In a new solution proposed this week in a New York Times op-ed, Sens. Bernie Moreno (R-OH) and Elizabeth Warren (D-MA) floated the idea of lifting the payroll tax cap to make the Social Security program’s math work once again. Their plan would replenish the Social Security trust by collecting more for Social Security withholding above the current $184,500 income cap—a limit that only benefits the highest earners.
“Social Security was created by overwhelming bipartisan congressional majorities,” they wrote. “Today, members of Congress from both parties must come together again to save it.”