Remember the quip about legendary dance team Fred Astaire and Ginger Rogers?
“Sure he was great, but don’t forget that Ginger Rogers did everything he did, except backwards and in high heels.”
When it comes to men and women saving for retirement, the comment still rings true today.
Women are catching up, but they are still thousands of dollars behind men in saving what they need to last them throughout retirement.
So how can women fix the problem? That’s easy, jokes Bloomberg reporter Suzanne Woolley:
“Just save a lot more while earning a lot less.”
Women have made enormous strides in the workplace. But there’s still a huge distance to go.
A sizable gap
The retirement gap between men and women is still daunting. Men are behind in saving for retirement, with an estimated $212,000 shortfall between what they have and what they need, but women are in even worse shape. They need to put aside an extra $268,000 to get where they need to be.
Financial Finesse, a provider of financial wellness programs in the workplace, exposed the sobering statistics in their 2015 Gender Gap In Financial Wellness report.
The calculations are based on assumptions for the typical 45-year old man and woman seeking to replace 70% of their working income once in retirement.
Why women are still behind … and how to catch up
It’s not rocket science, just simple math.
Women are behind because they make less, save less, need more (due to longevity), and lose out when they interrupt their working years due to childcare and other family responsibilities. They also tend to invest more conservatively, meaning they don’t get as much growth as they need.
One bright spot is that as women become more financially aware, they change their behavior to save and invest more actively.
In fact, financial education is key for women, says the Financial Finesse report. “Women are more likely to feel more confident about their financial decisions when they have done their homework and understand complex terms and choices.”
When women take steps to educate themselves financially – whether in the workplace, with an advisor, or online – they increase the odds they’ll make it to the financial finish line.