Why don’t women save as much as men?
A recent study conducted by two researchers at the University of Wisconsin tried to answer that question.
They interviewed state government employees to discover why women working for the state of Wisconsin have lower amounts saved in their retirement plans than men. In fact, women have only 70¢ in their accounts for each dollar saved by male workers.
What’s odd is that this holds true regardless of salary level or worker’s age. Given a man and a woman the same age and making the same salary, the woman saves a lower percentage of her salary on average than the man. At the same salary level, a woman is 20% less likely than a man to contribute the maximum amount to the retirement plan. Over time, that difference adds up to big numbers.
The women interviewed for the study didn’t seem to realize they’re falling further behind each day, and appeared sincerely committed to saving for retirement. But their lower contribution rates result in lower retirement balances, even though women need more dollars in their accounts to provide for their longer life expectancies.
So what gives?
The solution may be better workplace investment education for women. Many women gather information by talking to co-workers instead of reading employer-provided materials or seeking professional advice, so they may not sign up for their retirement plans until co-workers nudge them to do so.
Financial Tip: Don’t be afraid to ask questions or look for help. Try to save at least 10% of income each year to stay on track for retirement. Your workplace retirement plan is a great place to start.