THE RETIREMENT GENDER GAP
Making great strides in the workplace, women are pushing through the “glass ceiling,” taking on jobs and positions that were once unattainable. Though the advancement of women in business has improved women’s circumstances, one area that is often overlooked is retirement readiness. Having the right education and tools is important to help women achieve financial security in retirement.
While, broadly speaking, men and women may have similar needs when it comes to the basic costs and timing of retirement, women face a number of personal and professional challenges that can make it more difficult for them to achieve retirement security.
Despite gains in education, employment and earnings over the past few decades, women still lag behind their male counterparts when it comes to retirement savings. Research shows that women have about 30% less saved by the time they retire than men do.1 There are a variety of reasons for this discrepancy, but the net result is that women are achieving vastly different outcomes than men when it comes to securing their financial wellness in retirement.
With women making up 47% of the U.S. workforce,2 it’s important for employers to understand that retirement outcomes are not gender neutral. Employees, and your company’s long-term bottom line, can benefit greatly from engaging more fully in helping employees prepare for retirement.
FIRST, THE DISCREPANCY IS IN THE NUMBERS
Women continue to face a wage gap
The disparity in income levels between women and men is the primary reason why men often have more saved for retirement. On average, women earn 83 cents per dollar earned by men.3 Consider also that men dominate 15 of the 20 highest paying jobs, and women with bachelor’s degrees and full-time jobs are paid 26% less than their male counterparts.4 With comparatively less income, this leaves women with less money to allocate toward saving after they’ve covered their immediate expenses.
According to data research from the Organisation for Economic Co-operation and Development (OECD), “glass ceilings” account for 60% of the wage gap, with “sticky floors” accounting for the remaining 40%.5 Glass ceilings refer to obstacles that stand in the way of women advancing their careers, and sticky floors are scenarios where women are appointed to the bottom of the pay range and men to the top for the same position.6