Women Are Lagging Behind In Retirement Savings

The gap between the sexes may be shrinking when it comes to financial savings; however, women are still the ones who are lagging behind. Financial Finesse released a study which showed that there is a 26% gap between men and women in terms of savings. That being said, both of the sexes are said to have a shortfall that will be relative to what they will require during retirement. This goes further downward for women who are short $268000 relative to men who are only short $212000.

This is the calculation that takes into account the shortfall in savings that are needed when it comes to replacing the 70 percent of income during retirement.

But it does not end for women just there. Women have additional challenges as they have lower income than what men earn, they have saved less and face more health care expenses as well as life expectancy. When taking these factors into account, the gap gets wider and reaches approximately to 95%. In other words, women need extra $522,262 in the form of savings.

The founder of Life Income Management, Melody Juge, mentioned that the divide is half because of men and women having different trajectories when it comes to their career. Women usually leave the workforce to have children, and they are also more likely to be the caretakers of their old parents and relatives. An EFS financial advisor, Scot Hanson, said that a lot of his female clients feel responsible for family members, while men don’t feel that way as much.

2015 is the first year that this gap has received this much attention by financial analysts. Financial Finesse’s research shows that women did improve in some financial wellness categories since 2012. These categories include paying off credit cards bills in full, emergency funds, and being on target in their retirement plans. The figures show that women have showed an increase of 4%, while men have shown a downward curve in all of these categories.

Moreover, the financial planner at Financial Finesse mentioned that due to better employment prospects and women’s own financial education, this margin has been constantly shrinking.