The lapse in pay could take centuries to fix.

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Saving for retirement is a challenge for many Americans, especially during the COVID-19 pandemic. For women, however, the obstacles to saving for retirement and having enough income for a comfortable retirement are greater than those faced by men, according to “Still Shortchanged: An Update on Women’s Retirement Preparedness,” a report by the National Institute on Retirement Security (NIRS).

The reasons stem largely from the gender pay gap between what men and women earn over their careers, says the report: “Women face unique challenges in saving, largely stemming from a gender pay gap that persists into a retirement wealth gap.”

Below are seven ways the gender pay gap affects women and retirement.

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1. Gender pay gap hinders women’s ability to save

Around 40% of Americans have less than $300 in savings, and a “massive gender gap” exists when it comes to amounts saved by women compared to men, according to a survey by personal finance site GOBankingRates. For those with only $300 or less in savings, 45% are women, compared with only 29% of men.

Of survey respondents with at least $5,000 in savings, 38% were men compared to only 22% of women. For those with more than $10,000 in savings, women accounted for only 14% compared to 24% of men.

Find out: Effective Money Management Tips for Women

2. Women have less access to employee retirement benefits

Women are less likely (64%) than men (72%) to be offered retirement benefits by an employer, according to “Women and Retirement: Risks and Realities Amid COVID-19,” a report from Transamerica Center for Retirement Studies (TCRS).

One reason is because women are more likely to work part-time, which can exclude them from participating in an employer-sponsored retirement plan. “Only 44% of women who work part-time are offered a 401(k) or similar plan compared with 72% of women who work full-time,” says the report.

Find out: 6 Ways COVID-19 Puts Women’s Retirement at Risk

3. Women’s retirement income is lower than men

Women receive only 80% of the retirement income most men receive, according to the NIRS report. The study also found that while employed, women’s household income is only about 83% of the median household income for men.

4. Women’s career earnings limit retirement plan savings

The NIRS report found that the fact that women earn less over the course of their career means their contributions to an employer-sponsored retirement plan are generally less than their male colleagues.

“Men with savings in a defined contribution (DC) plan far surpass the earnings trajectory of women with savings in a DC plan, and earn significantly more than women without DC savings,” according to the report.

5. Divorce is a challenge to saving for retirement

Divorce can pose a “major challenge” to women’s ability to save for retirement, according to the NIRS report. The timing of a divorce or separation makes a big difference, however. The report found that if a woman divorces early in life, she has more time to build her own retirement savings.

Married women ages 18-64 are better off in terms of retirement preparedness than widowed women and divorced women, according to the NIRS. Divorced women surpass married women in the amount they’ve saved in defined contribution retirement plans while women who never married accumulate more savings once they reach retirement age.

Find out: 7 Ways to Rebuild Your Credit After Getting Divorced

6. Caregiving widens the gender wealth gap

Women are more likely than men to be caregivers for children for aging parents, which can widen the gender wealth gap even further due to earning less due to time off work, working part-time or leaving the workforce, according to  the NIRS report.

For many women, a change in work status due to caregiving responsibilities could also mean lost access to employer-sponsored retirement plans.

Find out: 6 Ways Being a Caregiver for an Aging Parent can Take a Financial Toll

7. More women than men lack retirement confidence

Around 24% of women surveyed in the TCRS report said they have less confidence in their ability to retire due to the COVID-19 pandemic, compared with only 20% of men, according to the TCRS report. Just 17% of women are “very confident” that they can fully retire comfortably, but 12% of women are “not at all confident” that they can live comfortably in retirement.

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About the Author

Deb Hipp

Deb Hipp

Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.

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