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270CG entitled '21st Century Challenges: Key Areas for Oversight' which 
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United States Government Accountability Office: 

21st Century Challenges: key Areas for Oversight: 

The Honorable David M. Walker: 
Comptroller General of the United States: 
Women's Institute for a Secure Retirement: 
Washington, D.C.
December 7, 2006: 

Estimated Fiscal Exposures ($ trillions): 

Explicit liabilities (Publicly held debt, military & civilian pensions 
& retiree health, other); 	
2000: $6.9; 
2006: $10.2. 

Commitments & Contingencies: e.g., PBGC, undelivered orders; 
2000: $0.5; 
2006: $0.9. 

Implicit exposures; 
2000: $13.0; 
2006: $38.8. 

Implicit exposures: Future Social Security benefits; 
2000: $3.8; 
2006: $6.4. 

Implicit exposures: Future Medicare Part A benefits; 
2000: $2.7; 
2006: $11.3. 

Implicit exposures: Medicare Part B benefits; 
2000: $6.5; 
2006: $13.1. 

Implicit exposures: Medicare Part D benefits; 
2006: $8.0. 

Total; 
2000: $20.4; 
2006: $49.9. 

Source: U.S. government's consolidated financial statement, Social 
Security and Medicare Trustees reports and Monthly Treasury Statement, 
September 30, 2006. 

Note: 2006 estimates are preliminary. Estimates for Social Security and 
Medicare are at present value as of January 1 of each year and all 
other data are as of September 30. 

[End of Table] 

How Big is Our Growing Fiscal Burden? 

Our total fiscal burden can be translated and compared as follows: 

Total fiscal exposures: $49.9 trillion; 
Total household net worth: $53.3 trillion: 
* Burden/Net worth ratio: 94 percent. 

Burden: 
Per person: $165,000; 
Per full-time worker: $395,000; 
Per household: $435,000. 

Income: 
Median household income: $46,326; 
Disposable personal income per capita: $32,392. 

Notes: (1) Federal Reserve Board, Flow of Funds Accounts, Table B.100, 
2006:Q2 (Sept. 19, 2006); (2) Burdens are calculated using estimated 
total U.S. population as of 9/30/06, from the U.S. Census Bureau; full- 
time workers reported by the Bureau of Economic Analysis, in NIPA table 
6.5D (Aug. 2, 2006); and households reported by the U.S. Census Bureau, 
in Income. Poverty, and Health Insurance Coverage in the United States: 
2005 (Aug. 2006); (3) U.S. Census Bureau, Income, Poverty, and Health 
Insurance Coverage in the United States: 2005 (Aug. 2006); and (4) 
Bureau of Economic Analysis, Personal Income and Outlays: September 
2006, table 2, 2006:Q3, (Oct. 30, 2006). 

Sources: GAO analysis. 

[End of Table] 

Composition of Spending as a Share of GDP Under Baseline Extended 
(January 2001): 

[See PDF for image] - graphic text: 

Line/Stacked Bar combo chart with 4 groups, 1 line (Revenue) and 4 bars 
per group. 

2005; 
Net interest: 0.8%; 
Social Security: 4.3%; 
Medicare & Medicaid: 3.7%; 
All other spending: 8.0%; 
Revenue: 20.3%. 

2015*; 
Net interest: 0%; 
Social Security: 5.1%; 
Medicare & Medicaid: 4.9%; 
All other spending: 5.6%; 
Revenue: 20.4%. 

2030*; 
Net interest: 0%; 
Social Security: 6.6%; 
Medicare & Medicaid: 9.4%; 
All other spending: 4.0%; 
Revenue: 20.4%. 

2040*; 
Net interest: 0%; 
Social Security: 6.7%; 
Medicare & Medicaid: 9.0%; 
All other spending: 4.4%; 
Revenue: 20.4%.

*All other spending is net of offsetting interest receipts. 

Source: GAO's January 2001 analysis. 

[End of Figure] 

Composition of Spending as a Share of GDP: (Assuming Discretionary 
Spending Grows with GDP After 2006 and All Expiring Tax Provisions are 
Extended): 

[See PDF for image] - graphic text: 
	
Line/Stacked Bar combo chart with 4 groups, 1 line (Revenue) and 4 bars 
per group. 	

2005; 
Net interest: 1.5%; 
Social Security: 4.2%; 
Medicare & Medicaid: 3.9%; 
All other spending: 10.5%; 
Revenue: 17.5% 

2015; 
Net interest: 2.5%; 
Social Security: 4.5%; 
Medicare & Medicaid: 5.3%; 
All other spending: 9.8%; 
Revenue: 17.5% 

2030; 
Net interest: 7%; 
Social Security: 6.7%; 
Medicare & Medicaid: 8.5%; 
All other spending: 9.8%; 
Revenue: 17.6% 

2040; 
Net interest: 14%; 
Social Security: 7.6%; 
Medicare & Medicaid: 10.3%; 
All other spending: 9.8%; 
Revenue: 17.6%

Source: GAO's August 2006 analysis. 

[End of Figure] 

The Way Forward: A Three-Pronged Approach: 

1. Improve Financial Reporting, Public Education, and Performance 
Metrics: 

2. Strengthen Budget and Legislative Processes and Controls: 

3. Fundamental Reexamination & Transformation for the 21St Century 
(i.e., entitlement programs, other spending, and tax policy): 

Solutions Require Active Involvement from both the Executive and 
Legislative Branches: 

21st Century Challenges Report: 

Provides background, framework, and questions to assist in reexamining 
the base: 

Covers entitlements & other mandatory spending, discretionary spending, 
and tax policies and programs: 

Based on GAO's work for the Congress: 

Issued February 16, 2005: 

Twelve Reexamination Areas: 

Mission Areas: 

* Defense: 
* International Affairs: 
* Education & Employment: 
* Natural Resources, Energy & Environment: 
* Financial Regulation & Housing: 
* Retirement & Disability: 
* Health Care: 
* Science & Technology: 
* Homeland Security: 
* Transportation: 

Crosscutting Areas: 

* Improving Governance: 
* Reexamining the Tax System: 

Key Elements for Economic Security in Retirement: 

Adequate retirement income: 

* Savings: 
* Social Security: 
* Pensions: 
* Earnings from continued employment (e.g., part-time): 

Affordable health care: 

* Medicare: 
* Retiree health care: 

Long-term care (a hybrid): 

Major Players: 

* Employers: 
* Government: 
* Individuals: 
* Family: 
* Community: 

GAO Criteria for Evaluating Social Security Reform Proposals: 

Reform proposals should be evaluated as packages that strike a balance 
among individual reform elements and important interactive effects. 

Comprehensive proposals can be evaluated against three basic criteria: 

Financing sustainable solvency: 

Balancing adequacy and equity in the benefits structure: 

Implementing and administering reforms: 

Social Security Represents an Important Source of Income for Women: 

88 percent of retirement-age women receive Social Security: 

Most women receive benefits at least in part based on their spouse's 
record. About 38 percent of women receive benefits solely on their own 
work record: 

Social Security represents an average of 53 percent of total income for 
unmarried women over 65, versus 38 percent of total income for 
unmarried men and 33 percent of total income for married couples of the 
same age: 

Source: Social Security Administration. 

Some Social Security Proposals are Targeted to Protect or Enhance 
Benefits for Women: 

Changes to spousal benefits--including earnings sharing between 
spouses, reduction in spousal benefits/increase to survivor's benefits, 
and reduction of the 10-year marriage requirement for divorced spouses: 

Changes in benefit computation--including dependent care credits, and 
shortening the computation period used to calculate retirement 
benefits: 

Establish minimum benefit--indexed to poverty level or percentage of 
poverty level: 

Other Social Security Reform Proposals May Weaken Benefits for Women: 

Changes in benefit computation--would extend the benefit computation 
period from 35 to 38 or more years, which would lower average benefits 
for most workers, especially those with fewer years of work history: 

Individual accounts: 

* New risks include investment risk, longevity risks, and lack of 
spousal protections: 

* Possible benefits include potential higher returns, and 
inheritability/ownership: 

* Women's tendency to invest more conservatively than men can have both 
positive and negative effects on income in retirement: 

Pension Protection Act of 2006: An Important Reform with Unfinished 
Business: 

PPA shrinks, but does not close, many loopholes regarding DB plan 
funding: 

PBGC deficit expected to continue to grow over the long term: 

Ultimately does not address fundamental mismatch between DB plan assets 
and liabilities: 

Will likely not reverse long-term decline in DB system: 

Financing of adequate retirement for all Americans continues to pose a 
major national challenge: 

* Issues of coverage and plan design remain largely unanswered: 

* Appropriate balance of responsibility for retirement among employers, 
government and workers remains unclear: 

Did not fully resolve issues raised by floor/offset arrangements with 
significant investment concentrations in employer securities: 

Pension Income for Women: 

Roughly half of all workers have access to retirement programs through 
their employer: 

Currently retired women are less likely than retired men to have a 
significant portion of their income from non-Social Security pensions: 

* In 2003, 29 percent of women and 45 percent of men age 65 and older 
had pension income: 

In 2004, 54 percent of full-time working women participated in employer-
sponsored pensions, versus 53 percent of men; however, women average 
lower benefits due to lower average earnings and years of work: 

Women are Less Likely Than Men to Have Pension Coverage: 

Women are less often in the paid labor force: 

More often ineligible to participate (part-time work): 

More frequently fail to meet vesting requirements (intermittent labor 
force participation) when employed by firms sponsoring pensions: 

More often employed in industries with below average rates of pension 
plan sponsorship, such as service or retail vs. manufacturing 
industries: 

However, women may receive spousal or survivor benefits through their 
husbands' pensions: 

Women's Pension Coverage is Improving, but a Significant Gap Remains: 

A 2003 study predicted that while women's income from private pensions 
should rise sharply relative to men's over the next 20 years, a 
substantial gap will remain: 

Even if experience and salary gaps are eliminated, women accumulate 
less pension wealth than men: 

Low-income women are particularly vulnerable: 

Source: Even, W.E., & Macpherson, D.A. (2003). When Will the Gender Gap 
in Retirement Income Narrow? 

Participation Rates in Employment-based Retirement Plans: 

Percent of Wage and Salary Workers Ages 21-64 Who Participated in an 
Employment-based Retirement Plan, 1987-2004: 

[See PDF for Image] - graphic text: 

Line graph with 2 lines, one representing the percentage of women and 
one the percentage of men: 

Year: 1987; 
Percent Men: 51%; 
Percent Women: 40.7%. 

Year: 1988; 
Percent Men: 51.2%; 
Percent Women: 40.8%. 

Year: 1989; 
Percent Men: 51.1%; 
Percent Women: 42.9%. 

Year: 1990; 
Percent Men: 51.5%; 
Percent Women: 42.9%. 

Year: 1991; 
Percent Men: 50.1%; 
Percent Women: 43.2%. 

Year: 1992; 
Percent Men: 48.8%; 
Percent Women: 43.9%. 

Year: 1993; 
Percent Men: 48.5%; 
Percent Women: 43.6%. 

Year: 1994; 
Percent Men: 51.0%; 
Percent Women: 45.2%. 

Year: 1995; 
Percent Men: 50.3%;  
Percent Women: 45.0%. 

Year: 1996; 
Percent Men: 50.8%; 
Percent Women: 45.8%. 

Year: 1997; 
Percent Men: 51.6%; 
Percent Women: 46.4%. 

Year: 1998; 
Percent Men: 53.6%; 
Percent Women: 48.1%. 

Year: 1999; 
Percent Men: 53.6%; 
Percent Women: 48.5%. 

Year: 2000; 
Percent Men: 53.7%; 
Percent Women: 49.3%. 

Year: 2001; 
Percent Men: 51.8%; 
Percent Women: 47.6%. 

Year: 2002; 
Percent Men: 49.7%; 
Percent Women: 46.6%. 

Year: 2003; 
Percent Men: 49.5%; 
Percent Women: 47.1%. 

Year: 2004; 
Percent Men: 49.4%; 
Percent Women: 47.2%. 

Source: Employment Benefit Research Institute, Issue Brief 286, October 
2005. 

[End of Figure] 

Across All Worker Status Categories, Women Are More Likely to 
Participate in Retirement Plans: 

Percentage of Wage and Salary Workers Ages 21-64 Who Participated in an 
Employment-Based Retirement Plan, By Work Status, 2004: 

[See PDF for Image] -  graphic text: 

Bar graph with two bars for each section. 

Full-time, Full-year; 
Women: 58.2%; 
Men: 55.4%. 

Full-Time, Part-Year; 
Women: 35.4%; 
Men: 30.1%. 

Part-Time, Full-Year; 
Women: 27.6%; 
Men: 20.2%. 

Part-Time, Part-Year; 
Women: 15.4%; 
Men: 12.5%. 

Note: While the previous slide showed that female wage and salary 
workers ages 21-64 were found-in the aggregate-to participate in a 
retirement plan at a lower level than males did, this is mainly due to 
female workers' overall lower earnings and/or lower rates of full-time 
work in comparison with males. As this slide illustrates, however, 
across all worker status categories, females were more likely to 
participate in a retirement plan than males. 

Source: Employee Benefit Research Institute estimates from 2005 March 
Current Population Survey: 

[End of Figure] 

Implications of the Shift From Defined Benefit to Defined Contribution 
Pension Plans: 

DB plans typically have special protections for spouses; DC plans 
typically do not: 

DB plans typically offer an annuity which provides a guaranteed life 
income; DC plans typically do not offer an annuity benefit: 

With DCs investment risk and decision-making generally lie with the 
employee: 

Women are less likely to preserve a lump-sum pre-retirement 
distribution in a tax-qualified savings vehicle prior to retirement: 

However, 

DCs are portable and generally better for workers who move in and out 
of the workforce: 

Maximum allowable vesting requirements are shorter in DC plans: 

Defined Contribution Plan Proposals: Spousal Consent: 

The Retirement Equity Act of 1984 required spousal consent to waive 
joint and survivor protections in defined benefit pensions: 

* In the following 10 years, the number of married men selecting joint 
and survivor annuities increased 18 percent: 

Some advocate extending spousal consent to defined contribution 
retirement distributions: 

Annuities Offer Some of the Same Protections as Social Security and DB 
Payments: 

Annuities are a reliable method for ensuring a life-time income stream: 

While Social Security is gender neutral in its benefit payments, women 
pay higher rates than men in the individually purchased private annuity 
market, based on their longer expected lifetimes: 

While Social Security benefits are adjusted for cost of living, few 
privately purchased annuities have this adjustment: 

Increased Responsibility and Risk for Employee in Defined Contribution 
Plans: 

Employees with DC pension plans must both elect to participate and 
select their investment choices: 

Employees bear the risk of market fluctuation, inflation, and proper 
selection/diversification of investments: 

Advocates favor automatic enrollment, which has been shown to increase 
participation, especially for lower earners, and automatic escalation 
of contribution amounts, which would further increase contribution 
rates: 

Retirement Savings "Leakage" is Another Risk of Defined Contribution 
Plans: 

Only half the population preserves lump-sum pre-retirement 
distributions: 

Of their most recent lump-sum pre-retirement distribution, 40 percent 
of women reported rolling their entire balance into a tax-qualified 
savings vehicle, versus 47 percent of men in 2003: 

44 percent of women reported rolling over some of those distributions 
into another tax-qualified savings vehicle, versus 50 percent of men in 
2003: 

Source: Employee Benefit Research Institute, Issue Brief 289, January 
2006: 

Aspects of Defined Contribution Pension Plans That May Enhance Women's 
Retirement Income: 

Portability: 

Typically, accumulated assets can be rolled over and move with the 
employee as they change jobs and the plan design does not penalize 
employees who have multiple employers: 

Vesting: 

Defined contribution: Since 2001, DC plans have been required to fully 
vest either after three years of service, or at the rate of 20 percent 
per year, starting in the second year: 

Defined benefit: Vesting requirements cannot exceed 7 years: 

Issues to Consider in Examining Health Care Cost, Access, and Quality 
Challenges: 

In reforming our health care system, the public needs to be educated 
about the differences between wants, needs, affordability, and 
sustainability l at both the individual and aggregate level. 

Ideally, health care reform proposals will: 

* Align incentives for providers and consumers to make prudent choices 
about health insurance coverage and prudent decisions about the use of 
medical services, 

* Foster transparency with respect to the value and costs of care, and: 

* Ensure accountability from health plans and providers to meet 
standards for appropriate use and quality. 

Issues to Consider In Examining Women and Retirement: 

Life expectancy by gender varies: 

Labor force participation rates by age and gender vary: 

Retirement income and pension coverage vary by gender: 

Working longer may ease the challenges of an aging population: 

Women Live Longer Than Men But The Gap is Closing Life Expectancy at 
Age 65, 1940-2005: 

[See PDF for Image] - graphic text: 

Line graph with two lines, one for women and one for men. 

Year: 1940; 
Male: 12.7; 
Female: 14.7. 

Year: 1945; 
Male: 13.0; 
Female: 15.4. 

Year: 1950; 
Male: 13.1; 
Female: 16.2. 

Year: 1955; 
Male: 13.1; 
Female: 16.7. 

Year: 1960; 
Male: 13.2; 
Female: 17.4. 

Year: 1965; 
Male: 13.5; 
Female: 18.0. 

Year: 1970; 
Male: 13.8; 
Female: 18.5. 

Year: 1975; 
Male: 14.2; 
Female: 18.7. 

Year: 1980; 
Male: 14.7; 
Female: 18.7. 

Year: 1985; 
Male: 15.2; 
Female: 18.8. 

Year: 1990; 
Male: 15.7; 
Female: 19.0. 

Year: 1995; 
Male: 16.2; 
Female: 19.1. 

Year: 2000; 
Male: 16.7; 
Female: 19.4. 

Year: 2005; 
Male: 17.0; 
Female: 19.6. 

Source: Social Security Trustees Report, 2006: 

[End of Figure] 

Numeric Growth in Labor Force by Women and Men, Projected 2004-2014: 

[See PDF for Image] - graphic text: 

Bar graph. Numbers in Thousands. 

Women: 7,485. 
Men: 7,214. 

Source: Bureau of Labor Statistics: 

Women Have Weaker Labor Force Attachment Than Men on Average: 

Compared to men, on average: 

Women work fewer hours per year: 

Women are less likely to work a full-time schedule: 

Women often bear the burden of caring for younger and older generations 
(e.g., their children and their parents): 

Women leave the labor force for longer periods of time than men: 

Decline in Labor Force Participation by Older Americans Has Leveled 
Off: 

[See PDF for Image] - graphic text: 

Line graph with 4 lines representing men and women of two different age 
groups. 

Labor force participation rate. 

Year: 1970;  
Men 55-64: 83%; 
Men 65+: 26.8%; 
Women: 55-64: 43.0%; 
Women: 65+: 9.7%. 

Year: 1971; 
Men 55-64: 82.1%; 
Men 65+: 25.5%; 
Women: 55-64: 42.9%; 
Women: 65+: 9.5%. 

Year: 1972; 
Men 55-64: 80.4%; 
Men 65+: 24.3%; 
Women: 55-64: 42.1%; 
Women: 65+: 9.3%. 

Year: 1973; 
Men 55-64: 78.2%; 
Men 65+: 22.7%; 
Women: 55-64: 41.1%; 
Women: 65+: 8.9%. 

Year: 1974; 
Men 55-64: 77.3%; 
Men 65+: 22.4%; 
Women: 55-64: 40.7%; 
Women: 65+: 8.1%. 

Year: 1975; 
Men 55-64: 75.6%; 
Men 65+: 21.6%; 
Women: 55-64: 40.9%; 
Women: 65+: 8.2%. 

Year: 1976; 
Men 55-64: 74.3%; 
Men 65+: 20.2%; 
Women: 55-64: 41.0%; 
Women: 65+: 8.2%. 

Year: 1977; 
Men 55-64: 73.8%; 
Men 65+: 20.0%; 
Women: 55-64: 40.9%; 
Women: 65+: 8.1%. 

Year: 1978; 
Men 55-64: 73.3%; 
Men 65+: 20.4%; 
Women: 55-64: 41.3%; 
Women: 65+: 8.3%. 

Year: 1979; 
Men 55-64: 72.8%; 
Men 65+: 19.9%; 
Women: 55-64: 41.7%; 
Women: 65+: 8.3%. 

Year: 1980; 
Men 55-64: 72.1%; 
Men 65+: 19.0%; 
Women: 55-64: 41.3%; 
Women: 65+: 8.1%. 

Year: 1981; 
Men 55-64: 70.6%; 
Men 65+: 18.4%; 
Women: 55-64: 41.4%; 
Women: 65+: 8.0%. 

Year: 1982; 
Men 55-64: 70.2%; 
Men 65+: 17.8%; 
Women: 55-64: 41.8%; 
Women: 65+: 7.9%. 

Year: 1983; 
Men 55-64: 69.4%; 
Men 65+: 17.4%; 
Women: 55-64: 41.5%; 
Women: 65+: 7.8%. 

Year: 1984; 
Men 55-64: 68.5%; 
Men 65+: 16.3%; 
Women: 55-64: 41.7%; 
Women: 65+: 7.5%. 

Year: 1985; 
Men 55-64: 67.9%; 
Men 65+: 15.8%; 
Women: 55-64: 42.0%; 
Women: 65+: 7.3%. 

Year: 1986; 
Men 55-64: 67.3%; 
Men 65+: 16.0%; 
Women: 55-64: 42.3%; 
Women: 65+: 7.4%. 

Year: 1987; 
Men 55-64: 67.6%; 
Men 65+: 16.3%; 
Women: 55-64: 42.7%; 
Women: 65+: 7.4%. 

Year: 1988; 
Men 55-64: 67.0%; 
Men 65+: 16.5%; 
Women: 55-64: 43.5%; 
Women: 65+: 7.9%. 

Year: 1989; 
Men 55-64: 67.2%; 
Men 65+: 16.6%; 
Women: 55-64: 45.0%; 
Women: 65+: 8.4%. 

Year: 1990; 
Men 55-64: 67.8%; 
Men 65+: 16.3%; 
Women: 55-64: 45.2%; 
Women: 65+: 8.6%. 

Year: 1991; 
Men 55-64: 67.0%; 
Men 65+: 15.7%; 
Women: 55-64: 45.2%; 
Women: 65+: 8.5%. 

Year: 1992; 
Men 55-64: 67.0%; 
Men 65+: 16.1%; 
Women: 55-64: 46.5%; 
Women: 65+: 8.3%. 

Year: 1993; 
Men 55-64: 66.5%; 
Men 65+: 15.6%; 
Women: 55-64: 47.2%; 
Women: 65+: 8.1%. 

Year: 1994; 
Men 55-64: 65.5%; 
Men 65+: 16.8%; 
Women: 55-64: 48.9%; 
Women: 65+: 9.2%. 

Year: 1995; 
Men 55-64: 66.0%; 
Men 65+: 16.8%; 
Women: 55-64: 49.2%; 
Women: 65+: 8.8%. 

Year: 1996; 
Men 55-64: 67.0%; 
Men 65+: 16.9%; 
Women: 55-64: 49.6%; 
Women: 65+: 8.6%. 

Year: 1997; 
Men 55-64: 67.6%; 
Men 65+: 17.1%; 
Women: 55-64: 50.9%; 
Women: 65+: 8.6%. 

Year: 1998; 
Men 55-64: 68.1%; 
Men 65+: 16.5%; 
Women: 55-64: 51.2%; 
Women: 65+: 8.6%. 

Year: 1999; 
Men 55-64: 67.9%; 
Men 65+: 16.9%; 
Women: 55-64: 51.5%; 
Women: 65+: 8.9%. 

Year: 2000; 
Men 55-64: 67.3%; 
Men 65+: 17.7%; 
Women: 55-64: 51.9%; 
Women: 65+: 9.4%. 

Year: 2001; 
Men 55-64: 68.3%; 
Men 65+: 17.7%; 
Women: 55-64: 53.2%; 
Women: 65+:9.6 %.

Year: 2002; 
Men 55-64: 69.2%; 
Men 65+: 17.9%; 
Women: 55-64: 55.2%; 
Women: 65+: 9.8%. 

Year: 2003; 
Men 55-64: 68.7%; 
Men 65+: 18.6%; 
Women: 55-64: 56.6%; 
Women: 65+: 10.6%. 

Year: 2004; 
Men 55-64: 68.7%; 
Men 65+: 19.0%; 
Women: 55-64: 56.3%; 
Women: 65+: 11.1%. 

Year: 2005; 
Men 55-64: 69.3%; 
Men 65+: 19.8%; 
Women: 55-64: 57.0%; 
Women: 65+: 11.5%.  

Source: United States Bureau of Labor Statistics, Labor Force 
Statistics from the Current Population Survey, [Hyperlink, 
http://www.bis.gov/data/home.htm]. 

[End of Figure] 

Why Older Americans Don't Work Longer: 

Cultural Expectation to Retire in Mid-60s: 

Social Security early retirement age is 62: 

Many private pensions have similar or lower eligibility ages: 

Older Americans Perceive Few Opportunities: 

Few older workers felt they had opportunities for partial retirement: 

Most older workers and retirees saw low wage, low skilled jobs as their 
primary employment opportunities: 

Most Employers Do Not Make a Special Effort to Hire and Retain Older 
Workers: 

Many employers say they are willing to implement policies to recruit 
and retain older workers, but few have actually done so: 

Employers cite barriers, such as federal pension regulations, to 
flexible employment options for older workers: 

Working Longer May Help Address the Challenges of an Aging Population: 

Impact on the Economy: 

Larger labor force: 

Additional economic growth: 

Impact on the Federal Budget: 

Additional tax revenue: 

Reduced expenditures: Social Security & Medicare: 

Impact on Individuals: 

Enhanced retirement security and quality of life: 

Median Amounts of Retirement Income are Smaller for Women Than Men: 

Median Value of Retirement Income from Specified Source of Men and 
Women 65 and Older, 2004: 

[See PDF for Image] - graphic text: 

Bar graph with a bar for men and a bar for women for each category. 

Wages and Salaries; 
Men: $20,800; 
Women: $ 12,000. 

Social Security; 
Men: $12,583; 
Women: $8,799. 

Asset Income; 
Men: $964; 
Women: $750. 

Pension Income; 
Men: $12,000; 
Women: $6,141. 

Source: Congressional Research Service: 

[End of Figure] 

Women Are As Likely As Men to Receive Social Security Benefits, but Are 
Less Likely to Have Income from Other Sources: 

Percentage of Men & Women 65 & Older Receiving Income from Various 
Sources, 2004: 

[See PDF for Image] - graphic text: 

bar graph with one bar representing men and the other women for each 
category. 

Social Security; 
Men: 88%; 
Women: 88%. 

Earnings; 
Men: 23%; 
Women: 14%. 

Other Public Pension; 
Men: 14%; 
Women: 10%. 

Private Pensions of Annuities; 
Men: 32%; 
Women: 18%. 

Income from Assets; 
Men: 59%; 
Women: 53%. 

Source: Social Security Administration, Income of the Population 55 or 
Older, 2004: 

[End of Figure] 

Older Women Are More Likely Than Older Men to Be Living Below the 
Poverty Level: 

Percent of Men and Women With Income Below 100 Percent of Poverty 
Level, 2004: 

[See PDF for Image] - graphic text: 

Bar graph with each bar representing men or women for each age group. 

Age: 55-59; 
Men: 7.4%; 
Women: 9.4%. 

Age: 60-64; 
Men: 9.6%; 
Women: 11.1%. 

Age: 65-74; 
Men: 7.3%; 
Women: 11.1%. 

Age: 75+; 
Men: 6.6%; 
Women: 12.8%. 

Source: U.S. Census Bureau, Current Population Survey, March 2005: 

[End of Figure] 

Women Have Fewer Resources At Retirement Than Men: 

Differences in lifetime earnings and work histories result in lower 
retirement income for women; compared to men, on average: 

Women have weaker labor force attachment and lower earnings: 

Women receive lower monthly Social Security benefits: 

Women are less likely to have pension coverage: 

Women receive lower pension benefits: 

Women receive less from asset income: 

Impact of Life Events on Financial Security: 

Marital Status: 

* Divorce: 

* Widowhood: 

Health Shocks: 

Long-term Care: 

Financial Impact of Divorce: 

For women, and some men, divorce typically means a decline in 
retirement income or savings or even poverty: 

The divorce rate increased significantly throughout the 1950s-1970s, 
but was stable from the mid-1970s through the mid-1990s: 

In 2001, first marriages ending in divorce lasted on average 8 years, 2 
ears less than the minimum required for Social security spousal 
benefits: 

Women and men who divorce experience a 44 percent decline in household 
wealth, on average: 

Sources: U.S. Census and Boston Center for Retirement Research: 

Financial Impact of Widowhood: 

Women and men who become widowed experience, on average, a 13 percent 
decline in household wealth: 

Only 21 percent of widows receive survivor pensions based on their 
husbands' benefits: 

In 2003, of those aged 65 and over: 

* 14 percent of men were widowers: 

* 44 percent of women were widows: 

Financial Impact of Health Shocks: 

Workers Near Retirement Age May Lose Current and Retirement Income Due 
to Unexpected Negative Health Events: 

Health shocks are likely to result in a loss of lifetime income for 
individuals and family because: 

* Affected worker may need to reduce work dramatically: 

* Spouse may also reduce work dramatically: 

* Private savings may have to be used to finance additional medical 
expenses: 

Living Longer Increases the Likelihood of Becoming Disabled: 

Proportion of those age 65 and over with chronic disability, 1999: 

Women: 23%; 
Men: 15%. 

Percentage of Medicare enrollees age 65 and over reporting inability to 
perform at least 1 of 5 certain physical functions, 2002: 

Women: 31%; 
Men: 18%. 

Source: Older Americans 2004: Key Indicators of Well-Being, Federal 
Interagency Forum on Aging Related Statistics: 

Living Longer Increases the Likelihood of Needing Long-term Care: 

Percent of the Population Needing Long-term Care, by Age, 2000: 

[see PDF for Image] - graphic text: 

Bar graph. 

Age: 64 and younger; 
Percent: 1.4%. 

Age: 65 and older; 
Percent: 14.0%. 

Age: 85 and Older; 
Percent: 50.0%. 

Source: Georgetown University Long Term Care Financing Project, "Who 
Needs Long Term Care?" 2003: 

[End of Figure] 

Women Represent More Than Two-thirds of Those Needing Long-Term Care: 

Women represent: 

69 percent of those age 65 and older who reside in a community such as 
an assisted living care center: 

72 percent of all nursing home residents: 

Source: Georgetown University Long Term Care Financing Project, "Who 
Needs Long Term Care?" 2003. 

Cost of Long-term Care: 

Average Annual Health Care Costs Among Medicare Enrollees Age 65 and 
Over, by Institutional Status, 2001: 

Nursing Homes and Other Long-term Care Institutions; 
Average cost in Dollars: $46,810. 

Community Residents; 
Average cost in dollars: $8,466. 

Source: Older Americans 2004: Key Indicators of Well-Being, Federal 
Interagency Forum on Aging Related Statistics: 

[End of table] 

GAO's Ongoing Work on Women's Retirement: 

Gordon Smith, Chair of the Senate Special Committee on Aging, has 
requested that GAO: 

Describe the current status of women in the labor force, the sources 
and adequacy of women's retirement income, and the rate of poverty 
among women: 

Describe and examine the effects that significant life events may have 
on women's retirement income, such as divorce, health shocks, 
widowhood, or workforce interruptions: 

Examine and describe the potential impacts of Social Security and 
employer-provided pension reforms that are targeted at women, as well 
as those that may inadvertently have a different impact on men and 
women: 

Project women's retirement income given selected elements of individual 
Social Security and employer-provided pension reform options. 

Projected issuance date is June 2007: 

Key Oversight Areas for Congress: 

On November 17, 2006, the Comptroller General submitted a letter to 
Congress recommending three areas of consideration to improve the 110th 
Congress' oversight of federal programs: 

Targets for near-term oversight (e.g., reviewing the effectiveness of 
strategies to ensure workplace safety): 

Policies and programs that are in need of fundamental reform and re- 
engineering (e.g., strengthening retirement security through reforming 
Social Security, increasing pension saving, and promoting financial 
literacy): 

Governance issues that should be addressed to help ensure an 
economical, efficient, ethical, and equitable federal government 
capable of responding to the various challenges and capitalizing on 
related opportunities in the 21St century (e.g., pursuing the 
development of key national indicators): 

Strengthen Retirement Security Through Reforming Social Security, 
Increasing Pension Saving, and Promoting Financial Literacy: 

Recommended Congressional actions to improve oversight of the Social 
Security and pension systems: 

Take actions to restore fiscal solvency and sustainability to the 
Social Security programs. 

Monitor the effectiveness of recent pension legislation designed to 
strengthen plan funding and reduce reliance on the federal pension 
insurance program: 

Examine adequacy of 401(k) balances and other forms of self-directed 
saving: 

Improve federal agencies' efforts to inform American workers about the 
importance of saving, the amounts that will be necessary for an 
adequate retirement, and the importance of annuitizing retirement 
balances: 

Evaluate and improve federal agencies' coordinated leadership of 
financial literacy initiatives to enhance such programs' effectiveness: 

Identify and estimate the cost of ways of evaluating financial literacy 
programs to determine if they promote positive behavioral change: 

Key Leadership Attributes Needed for These Challenging and Changing 
Times: 

* Courage: 
* Integrity: 
* Creativity: 
* Stewardship: 
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(202) 512-4800: 

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