How To Stop Millennial Women From Falling Further Behind

vintage girls

Have we come a long way, baby? Or are young women no better off than they were decades ago?

As a mother of a young Millennial daughter, there is a new study out that makes me terribly sad.

To paraphrase the 1970s ad, have we really come a long way, baby?

Or is this more a case of, the more things change, the more they stay the same?

Wells Fargo released a study last week showing that Millennial women (those 22 to 33 years old) are already well behind their male peers in terms of earnings and savings. If things don’t turn around, they could be behind to the tune of $2 million or more by the time they retire.

They’ve only been in the working world a few years, and they’ve already lost precious ground.


According to the study, median annual household income reported by millennial men was $77,000 versus $56,000 for women.

Among college-educated millennials, median income was reported to be $83,000 for men and $63,000 for women.

What it all means: With the significantly lower income reported by women, they will find it very difficult to pay their bills, raise a family, and save for their own retirement, especially given a woman’s normally longer lifespan.

Let’s put that $20,000 wage differential in perspective. If our young adult male worker saves only $10,000 of that extra salary starting at age 25, and earns a 7% annual return, how much more will he have by retirement at age 65?

His higher salary, and ability to save $10,000 more each year, will result in over $2,000,000 more saved – compared to his female colleague – by the time he’s 65 (excluding taxes), proof that millennial women are already starting to fall alarmingly behind.

Savings and Investments

College-educated millennial men reported median household investable assets of $58,500 versus $31,400 for women.

More men (61%) than women (50%) report that they are saving for the future.

Of those, 26 percent of men versus only 9 percent of women are saving more than 10 percent of their income.

What it all means: As a CERTIFIED FINANCIAL PLANNER (CFP®), I normally recommend that young adults start saving as soon as possible with the goal of putting aside at least 10%, and ideally 15%, of their income each year for retirement.

The study suggests that women are off to a very disappointing start. They already have less saved than men. Fewer women than men are actively investing for the future, and fewer still are saving enough.  The survey suggests that if things don’t change, less than 10% of young women are likely to have enough saved to support themselves in retirement.

What’s the problem?

Wells Fargo says those surveyed are “struggling under the pressure of debt” with over half “living paycheck to paycheck.”

“Women are lagging behind men,” said Karen Wimbish, director of retail retirement at Wells Fargo. “Millennial men are earning more, saving greater percentages of their income and report having more accumulated assets.”

What can you do?

  • Parents, raise your daughters to understand the importance of saving money, investing wisely and learning enough about personal finance to safeguard their own financial security and that of their family.
  • Young women need to take an active role in learning about, and participating in, workplace retirement plans. If their mom is actively involved in financial decision-making at home, daughters are likely to follow in their footsteps.
  • Saving right off the bat, and targeting that all important 10-15% saving rate, is critical. Millennials, if you start saving early, you don’t need to save that much.  But if you wait until your thirties or forties, the bill gets much steeper.
  • Don’t have enough to save? Before you make that argument, track every penny you spend to see where your money is really going. In all likelihood, your monthly cable bill, take-out lunch spending, and mani-pedis are eating into your potential savings budget.
  • Money can’t give you happiness, but it can give you more choices and more freedom to live the life you want. By building up your nest egg now, you’re buying more lifestyle choices down the road.

Tip:  If there is a young Millennial adult in your household, you may want to share with them a very simple but effective article on “The Top 10 Personal Finance Rules to Live By,” written for by personal finance writer Craig Guillot. It provides short and to-the-point rules for navigating the complex personal finance decisions every young person will face.

About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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