More than half (57 per cent) of U.S. women say they don’t earn enough to save for retirement and 26 per cent say they agree strongly with this statement, according to a new survey by the Transamerica Institute.
The survey, which polled more than 5,600 employees, found while a similar percentage (50 per cent) of men said they don’t earn enough to save for retirement, just a fifth (19 per cent) of male respondents said they strongly agreed with the statement. Indeed, while nearly two-thirds (60 per cent) of women said they’re confident they’ll be able to fully retire with a comfortable lifestyle, this percentage lags behind men who expressed the same sentiment (73 per cent).
Both women (53 per cent) and men (61 per cent) cited saving for retirement as their No. 1 current financial priority, followed by building emergency savings (44 per cent and 40 per cent, respectively).
However, women had only $2,400 in emergency savings, on average, while men had saved, on average, $9,000. A fifth (20 per cent) of women said they have no emergency savings at all, compared to just 13 per cent of men. Roughly a quarter of women (26 per cent) and men (22 per cent) said they were unsure how much emergency savings they had.
The average total savings in household retirement accounts reported by female respondents was less than half of their male counterparts (US$44,000, compared to $91,000). Women were also less likely than men to have saved $250,000 or more in total household retirement accounts (23 per cent and 35 per cent, respectively). However, 26 per cent of women and 17 per cent of men said they’ve saved less than $10,000 or nothing at all.
Women (76 per cent) were less likely than men (81 per cent) to participate in a workplace 401(k) savings plan. Among women who said they participate in a 401(k), they contributed, on average, just 10 per cent of their salary, compared to 12 per cent for men. More than a third (36 per cent) of women said they’ve taken a loan, early withdrawal and/or hardship withdrawal from their 401(k) or a similar plan. On average, female respondents said they believe they’ll need to have saved $500,000 by the time they retire in order to feel financially secure, while men said they’d need $600,000.
“Today’s women are more educated and enjoy unimaginable career opportunities than previous generations,” said Catherine Collinson, president and chief executive officer of the Transamerica Institute, in a press release. “Yet, despite these advancements, women continue to be at greater risk than men of not achieving a financially secure retirement. The gender pay gap leaves women with less income available to save.
“Moreover, women are more likely to take time out of the workforce for parenting and caregiving. These factors impair a woman’s lifetime earnings, retirement savings and government and employer benefits. On top of these factors, statistically, women live longer than men, so they have an even greater need to save for older age.”