On average, women retire with 27 per cent less savings than men, according to a new report from Sun Life Financial Inc.
The report, based on two surveys of members in workplace retirement savings plans administered by Sun Life, found women are consistently underutilizing these plans, despite living longer and spending more years in poorer health.
It noted women aren’t as likely to maximize employer matching contributions at every income level. Roughly a third (30 per cent) of women in households earning less than $70,000 maximize their match, compared to 40 per cent of men. In households with incomes above $200,000, 45 per cent of women maximize their match versus 57 per cent of men. Similar gaps appear in overall participation, with women trailing men in receiving any level of employer matching across all income brackets.
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This gap persists across age groups and is most pronounced during peak earning years. Among members aged 35 to 44, men were 18 per cent more likely than women to maximize employer matching. Differences also remain when accounting for household earning roles, with women contributing less of their salary than men as both primary and secondary earners.
The report suggested the gap is driven by lower financial confidence among women, which is associated with weaker savings outcomes. Confidence was found to have a significantly greater impact on wealth accumulation than financial knowledge alone, and women are disproportionately represented in lower-confidence investor groups.
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Targeted supports, such as digital planning tools and access to advice, were shown to materially improve outcomes. Women who used planning tools increased their employer matching maximization by 69 per cent and significantly increased overall participation in employer matching.
These improvements were highest among women with low financial confidence, where employer matching participation increased from 33 per cent to 75 per cent.