Working women in the United States will need to save more—and at a much faster pace—to satisfy the average cost of retirement, a report finds.
Financial Finesse’s Gender Gap in Financial Wellness Report finds there’s a 26% gap in the shortfall between the median 45-year-old man and the median 45-year-old woman’s needed retirement savings to replace 70% of their income in retirement plus projected healthcare costs.
Using data from the Bureau of Labor Statistics Consumer Expenditure Survey, the report also finds the median 45-year-old man is projected to have a savings shortfall of US$267,233 to meet average retirement expenses at age 65, compared to a shortfall of US$522,262 for the median 45-year-old woman.
It’s important to analyze the purchasing power gap between men and women when it comes to retirement savings because “the cost of goods and services does not change based on your gender,” says Financial Finesse CEO Liz Davidson.
“Women need to know that they fundamentally will have to save more, on average, to adequately fund retirement than their male counterparts,” she adds.
The report also finds there are large gaps in the areas of investing and money management where men show much more confidence in their financial decision-making than women.