Helping close the gender gap in retirement

Women and men currently in the workforce are placing a priority on saving money for the future at a similar rate, yet their savings amounts are wildly different.

The 23rd annual Transamerica Retirement Survey of Workers found that the median total savings in household retirement accounts among nearly 3,000 women surveyed was $44,000, compared with $91,000 for a similar population of men. The median total household emergency savings was $2,400 for women, compared with $9,000 for men.

That is despite women and men citing saving for retirement as a top current financial priority at a similar rate. Fifty-three percent of women cited saving for retirement as a top priority, second behind paying off debt (62%). Sixty-one percent of men cited saving for retirement as a top priority, ahead of paying off debt (57%).

“Today’s women are more educated and enjoy unimaginable career opportunities than previous generations. Yet, despite these advancements, women continue to be at greater risk than men of not achieving a financially secure retirement,” Catherine Collinson, CEO and president of the not-for-profit Transamerica Institute, said in a news release. “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 – an invaluable labor of love without pay. 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.”

Concerns related to retirement are prevalent among women and men alike in the survey, but at a higher rate for women. Just 19% of women and 26% of men are “very confident” they will be able to fully retire with a comfortable lifestyle. While 57% of women said they don’t have enough income to save for retirement, 50% of men said the same.

Seventy-six percent of women surveyed are contributing to a 401(k) or similar retirement savings plan at work if offered, with a median contribution rate of 10% of their annual salary. Eighty-one percent of men are contributing, at median rate of 12%.

For women in the workforce struggling for solutions, resources abound:

• The survey, produced annually by the Transamerica Center for Retirement Studies in conjunction with the Transamerica Institute, includes a lengthy list of recommendations for women, employers, and policymakers.

• The survey found that 32% of women currently have a professional financial adviser, compared with 39% of men. A recent PFP Section (Personal Financial Planning) podcast episode features a CPA personal financial planner sharing how her experiences have led to a better understanding of best practices for helping female clients.

• A recent Journal of Accountancy podcast episode features the CEO of a wealth management firm discussing her views on the unique challenges women can face and how her firm has prioritized lending a helping hand.

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.