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Women and Retirement: Saving Less, Worrying More

4 recommendations from a Transamerica retirement expert

By Richard Eisenberg

The 17 Annual Transamerica Retirement Survey: A Compendium of Findings About American Workers just arrived and it probably should have come with a hankie. That’s because I found myself sad reading the report’s findings showing that, compared to men, women are: saving far less for retirement, worrying a good deal more and calling retirement saving a lower financial priority.

women and retirement
Credit: Getty Images

“For so many women, it’s an uphill battle,” says Catherine Collinson, president of Transamerica Center for Retirement Studies (TCRS). “The message isn’t sinking in that we have to be extremely savvy in how we manage our own financial lives.”

And, Collinson adds: “There are many things women can do that are within reach, but they’re not taking advantage of them.” I’ll get to her recommendations in a bit.

Women and Retirement: The Numbers

But first, a few of the stark highlights from the 300-page TCRS report, based on a Harris Poll survey of 4,161 U.S. workers:

  • Women have $34,000 in household retirement savings overall (median), the same as in 2012; men now have $115,000, up from $50,000 in 2012; among boomers, women have saved $109,000, compared to $211,000 for men (estimated medians)
  • 72 percent of women are saving for retirement; 80 percent of men are
  • 75 percent of women offered a 401(k) or similar plan are participating in it; 79 percent of men are
  • Women who participate in a 401(k) or similar plan contribute 6 percent of pay (median); men contribute 10 percent (median)
  • 56 percent of women are very involved in monitoring and managing their retirement savings; 70 percent of men are

Men, the survey also found, most frequently cite saving for retirement as their greatest financial priority right now. For women, the top financial priority is “just getting by — covering basic living expenses;” 51 percent of women say saving for retirement is a financial priority, but 62 percent of men do.

And when it comes to retirement confidence, the TCRS survey finds the gender gap is the biggest it’s been in the past five years: only 55 percent of women are now confident about retiring comfortably, while 68 percent of men are and 43 percent of women believe they are building a large enough retirement nest egg, while 59 percent of men believe they are.

Explanations for the Gender Disparities

What gives?

Part of the answer for the retirement savings disparity, Collinson says, is the gender pay gap. Women earn 79 cents for every dollar that men make, on average. When women earn less than men, of course, they have less money to save.

Another reason, Collinson notes: Women are more likely than men to take chunks of time away from work to raise children or provide caregiving. That means fewer years with income to save, fewer years with employer matches on retirement plans and reduced Social Security checks in retirement, since those government benefits are pegged to a worker's pay.

“In the overall context, there are some societal differences that make it more challenging for women to save,” says Collinson.

But there’s something more at work, so to speak.

Women's Gloominess About Finances

Based on the TCRS survey, women today have a far more dour view of their finances than men. Just 14 percent of the women surveyed felt they’ve fully recovered from the Great Recession. By contrast, 25 percent of men felt they have. This may explain why women said they had just $2,000 in emergency savings, on average. Men had $10,000.

A storm cloud hanging over women: health care costs in retirement, which are expected to be substantially higher than men’s. The recent HealthView Services report, The High Cost of Living Longer: Women & Retirement Health Care, estimated that lifetime health care costs for a 65-year-old woman living to 89 will be $314,673, on average, compared to $267,395 for men.


Put it all together and you begin to understand why the percentage of women saving for retirement has dropped steadily since 2012, while it’s been constant (and higher) for men.

Yet that's happening at a time when Americans, overall, are feeling increasingly chipper about their finances. In the just-released Fidelity Investments New Year Financial Resolutions Study, 45 percent of Americans say they’re in a better financial situation this year (much higher than the 39 percent who said so last year) and 70 percent predict they’ll be better off financially in 2017.

4 Retirement Planning Tips for Women

Collinson offered four tips for working women to help them bolster their retirement prospects:

1. If your employer offers a retirement plan, contribute to it. As the TCRS survey noted, 25 percent of women with that option are declining to enroll.

2. If you’ll be contributing to an employer-sponsored retirement plan in 2017, make those automatic payroll deductions as large as you can. By law, you’ll be allowed to save as much as $18,000 in a 401(k) next year; $24,000 if you’ll be 50 or older, due to the “catch-up” contribution rule.

3. Use a free online calculator to estimate your retirement savings goals. “Don’t guess,” says Collinson.

Many people, it turns out, do just that. In the new 2016 Adult Financial Literacy Report from the Champlain College Center for Financial Literacy, Americans received a C grade for “trying to figure out how much they needed to save for retirement.”

Collinson thinks Champlain is being kind. “I’d be a harsher grader. I’d give Americans a D,” she says.

4. Learn more about retirement investing. A striking 75 percent of women said they don’t know as much as they should about retirement investing — roughly the same percentage as in the past four years. Only 62 percent of men felt this way. (I know, the men may be pretending to know more than they do and the women may be being more honest. I’m just the messenger.)

If your employer offers financial workshops or other types of retirement saving educational advice, sign up for them. “In the 20-plus years I’ve been doing this, I’ve observed continuing innovation in educational services and planning tools,” says Collinson. “Yet only a small percentage of people take advantage of them.”

Why so few? “Inertia. People have a lot going on in their lives,” notes Collinson.

Photograph of Richard Eisenberg
Richard Eisenberg is the former Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue and former Managing Editor for the site. He is the author of "How to Avoid a Mid-Life Financial Crisis" and has been a personal finance editor at Money, Yahoo, Good Housekeeping, and CBS MoneyWatch. Read More
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