Apr 5, 2021
Why Women are Behind in Retirement Savings
The wage gap and less access to workplace plans have an impact.
While retirement should be a time when you can stop working and just enjoy life, a new study shows that women may be less prepared financially for retirement than men.
A November, 2019 survey by The Transamerica Center for Retirement Studies found that men and women begin saving for retirement around the same time, and with roughly the same target sum in mind. But, women may fall behind men in retirement planning because they may make less than men on average. Women may also make more frequent career changes because they tend to be the primary caregivers in families.
The median estimated household retirement savings for women was only $23,000, compared to $76,000 for men, according to Transamerica, which conducts the survey annually with The Harris Poll. The survey collected responses from 5,100 workers and 1,800 employers.
What the Survey Found
The difference between men and women in their retirement savings begins early. The survey found that men start saving for retirement on average at age 26, while women begin a full year later, at age 27. And while both men and women hope to have a median $500,000 in retirement funds, 55% of women say they plan to retire after age 65, or not at all, compared to 53% of men.
Here are more details from the survey:
- Thirty percent of men surveyed said they had saved $250,000 or more for retirement, compared to 16% of women,
- Fifty-seven percent of women have a plan for retirement, whether written or not, compared to 71% of men.
- Nearly half of women surveyed said they didn’t feel confident that they would retire comfortably vs. less than one third of men.
- Women are 8% less likely than men to have a workplace retirement plan such as a 401(k), because they are more likely to work part time.
- While most women (73% of those women surveyed) participate in a retirement plan if it’s offered, women contribute an average eight percent of their annual salary compared to 10% of men.
- Generally speaking, 68% of women are saving for retirement compared to the 81% of men.
- 84% of women said that they plan to work after they retire for financial reasons, compared to 77% of men.
Women stay the course
The TCRS survey also found that 26% of women plan on using earnings from an investment account in retirement, compared to 42% of men, which could demonstrate that women are less likely than men to invest.
Yet, when women do invest, they are more likely than men to keep a level head during periods of market volatility, according to a Stash survey.
The findings of the TCRS survey generally correlate with those of a November, 2018 survey from Stash, which found that more men tend to save for retirement than women. The survey found that slightly more than half of women who use Stash were saving for retirement, compared to two thirds of men.Don’t get left behind when it comes to retirement. You can invest and save for retirement with Stash.