Several recently released studies are painting a gloomy financial picture for women headed into retirement, blaming lower salaries, longer life expectancies, lack of savings, and poorer saving and investing skills.

Women continue to be less prepared for retirement than men, according to a study released in July by Hewitt Associates, a global human resources consulting and outsourcing company. The study found that women need to save more for retirement than men and that the gap between the amount women need to save and the amount they are actually saving is larger than the gap for men—and will only continue to grow.

The study examined the projected retirement levels of nearly two million employees at 72 large U.S. companies. It found that both men and women are on track to replace 85% of pay at retirement, assuming average life expectancy. However, women, on average, need to replace nearly 130% of their final pay at retirement—7% more than men do.

The following factors affect women’s retirement readiness:

Less income: Although the study notes that women’s income has increased 63% in the past 30 years, their salaries still trail men’s. The average woman in the study earned $57,000 a year compared to $84,000 for the average man. Another study—released in May by the Women’s Institute for a Secure Retirement (WISER), titled The Female Factor 2008: Why Women Are at Greater Financial Risk in Retirement—found that women earn 77 cents for every dollar earned by men, which translates into a median retirement income of just 58% of men’s. The median salary for women working full-time in 2006 was $32,515 compared to $42,261 for men, $27,535 for African American women, and $22,285 for Hispanic women.

Longer life span: Women are expected to live longer than men—the Hewitt study said almost three years longer, while the WISER study said five years. Either way, women will need more money to cover a longer life span and increased medical costs.

Timid investment strategies: Women have less money saved in their 401(k) plans than men do. In the Hewitt study, the average plan balance for women was $56,320—nearly $47,000 less than men. Thirty percent of women did not contribute to their 401(k) plans in 2007, and another 24% did not contribute at a level high enough to take advantage of their company’s matching contribution. In addition, women tend to invest less in riskier equity investments and are about half as likely as men to make a trade. Fewer women than men make changes to their contribution rate each year as well.

Spotty savings patterns: Women are more likely to be in and out of the workforce for family reasons, which can result in hundreds of thousands of dollars in missed earnings, promotions, raises, and benefits over the course of a career. The WISER report said women are in the workforce an average of 12 years less than men, which also translates to less money in retirement savings. Women also tend to wait two to four years longer than men to start saving for retirement.

In addition, the Americans for Secure Retirement—a broad-based coalition of groups working to ensuring retirement security—points out that less than a third of part-time workers, who are disproportionately women, participate in employer-sponsored pension plans. For women who work full-time and do participate in such plans, their monthly payments are generally less than male retirees’.

Other results of the WISER report:

• Women are far more likely than men to be widowed and living some part of their retirement years alone.
• Older women living alone—whether widowed, divorced, or never married—face much higher rates of poverty than men do. Approximately one in five unmarried elderly women is poor.
• More than one of 10 female retirees and one of five single women over age 65 live on less than $10,000 a year.
• The average Social Security benefit for women is $800 per month, compared to $1,177 for men.
• Of women aged 65 years today, one in three can expect to live into her 90s.

And a particularly discouraging statistic came out of a survey by the Employee Benefit Research Institute and the Investment Co. Institute, reported in USA Today: about 25% of women have no savings at all for retirement.

The WISER study identified lifetime annuities as an important tool that women can use to plan for a more secure retirement. According to USA Today, “Some advisers suggest that when women reach retirement, they should consider buying an immediate annuity, which turns a lump-sum investment into a periodic stream of income.” It’s not without risk, as inflation can erode fixed payments over time. For more on annuities, visit ImmediateAnnuities.com.

Legislation currently before Congress, the Retirement Security for Life Act (H.R. 2205, S. 1010), would encourage Americans to secure a steady stream of income in retirement through life-contingent annuities by excluding federal taxes on half of the annual income from a life annuity, up to a maximum of $20,000. For an average American taxpayer in the 25% tax bracket, this would result in $5,000 of tax savings. The bill was introduced in May 2007 and is sitting in the House Committee on Ways and Means.

Ultimately, retirement may be an uneasy place for both women and men currently heading that direction. The Hewitt study says four of five men and women aren’t saving enough to keep up the same lifestyle after they stop working. Inflation and rising medical costs mean workers will need to replace 126% of their salary after retirement to maintain their lifestyle. Currently, both men and women are on track to replace around 85% of that amount.

Another study released in July, conducted by Ernst & Young LLP, found that middle-income Americans entering retirement now will have to reduce their standard of living by an average of 24% to minimize the likelihood of outliving their financial assets. Those Americans seven years out from retirement are even less prepared, and the study estimates that they will have to reduce their standard of living by even more, an average of 37%. Retirees will have a more financially secure retirement if they have a guaranteed source of retirement income beyond Social Security, such as an annuity or a defined benefit plan.

“Many Americans envision a retirement where their lifestyle continues much as before,” Tom Neubig of Ernst & Young said in a press release. “Our work shows that this is not a realistic expectation and that, with the current state of savings and potentially very long life expectancies, many retirees will have to cut back far more on expenditures than they had ever expected.”