Less income means ladies work longer, harder over their lifetimes
It’s never too early to save for retirement. But for women, there’s never enough to put away.
Women are still primary caregivers, still earn less than their male counterparts, and still don’t believe they are financially ready for retirement, according to investment management group MFS. All of these factors mean when retirement age comes around, women are less likely than men to be able to afford it.
While 93 percent of men with adolescent children are in the workforce, only 70 percent of their female counterparts are. It’s even less for women with young children, as just 65 percent of them are working if they have children under 6 years of age. As more ladies are out of the workforce to raise children, saving for retirement is even harder. Moreso because women don’t know the options available to them.
“Due to the effects of compounding, saving money for retirement during the early years in your career is crucial,” says Jenine Garrelick, an MFS sales director. “For women who’ve put their careers on hold, there are investment vehicles, such as spousal IRAs, that can help them avoid putting their retirement security in jeopardy. However, most women don’t know about the options available to them.”
Being unaware is just another hurdle women must face as the lesser-paid sex. MFS says just one-third of women are confident about saving for retirement. Only 40 percent are confident in their financial knowledge to tackle money problems. The same amount admitted to knowing about college savings accounts, IRAs and employee-sponsored retirement plans.
It’s not a shocking revelation that women know less about money than men. Men admit they are more likely to seek financial advice than women. In fact, only 1-in-4 women have ever sought financial advice. It goes back to confidence — women don’t even talk to other women about money, and believe it’s a taboo subject to bring up in any setting. It’s pretty unfortunate considering that women are consistently better money managers than men.
Another financial hurdle for ladies
The gender pay gap is no secret. Women won’t see true equal pay for hundreds of years. Due to their lack of equal earnings, women struggle even more with saving. If they don’t have enough money coming in, how will they have enough money to save? Sadly, the worst jobs for women are in finance.
Unequal pay isn’t just about money in the moment. Because women will earn less than men over their lifetimes, and since women will outlive men, ladies end up paying more in retirement health care than men. The two-year average age difference in live expectancy costs women more than $35,000 in health care later in life.
While health care is a large portion of retirement costs, it’s not the only one. For women that take career breaks — whether to care for young children or older relatives — they will lose out on nearly $1.3 million. Longer lasting lives means that women need to be better financially educated earlier in life. MFS says most women surveyed are worried they will outlive their retirement savings, but in general, that’s most anyone right now, regardless of age or gender.
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Article last modified on June 27, 2017. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Women Struggling Hard with Retirement Savings - AMP.