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Why aren't women saving as much for retirement as men?

by Jim Sloan

Women live longer than men, and studies show that they spend more years in retirement than men do. At the age of 65, most women will be expected to live another 20 years, while men will live just a little over 17 years. What's more, most women will retire at age 61, and demographers are predicting that many of them will survive into their 90s.

So is there a discrepancy between men and women when it comes to saving for retirement?

Savings lag behind men

Not only do women typically earn less--according to the White House National Economic Council, women in 2010 earned an average of 77 cents for every dollar earned by men--also but just over half of women are saving for retirement compared to 62 percent of men, according to MSN.

It's also true that men set higher savings investment goals for retirement than women. According to a recent Well Fargo and Harris Interactive survey, men strive to have investments of $400,000 for retirement while a woman's goal is only $200,000. To make matters worse, women are slightly less likely than men to be offered retirement benefits at their job.

The Wells Fargo survey also found that women are aware of the problem with their savings accounts; they are less confident in their investments for retirement, and a majority of them are "unsure or unrealistic" about what their annual withdrawals from their savings accounts should be in retirement. Also, they are leery of using the stock market for their investments.

The result is that women are 71 percent more likely than men to live below the poverty line in retirement, msn.com said.

Women lack confidence in stock market, Social Security

Here are some other findings from the Wells Fargo survey:

  • Just over half of women feel confident that they have enough in their savings account and investments for retirement. Women are less likely than men to believe Social Security will still be around when they need it.
  • On average, women have saved just $20,000 for retirement--$5,000 less than what men have saved.
  • Nearly 30 percent of women between the ages of 40 and 69 aren't sure how much they'll need to take out of their retirement savings each year during retirement.
  • About 27 percent of women are confident in the stock market, compared to 40 percent of men. About 40 percent of women said they would purchase a CD account rather than invest in the stock market, but only 30 percent of men said they would forsake the market in favor of a certificate of deposit.

Wells Fargo noted that even though the ratio of women in college to men in college is 3 to 2, and that women hold more than half of the high-paying management jobs in the U.S., when it comes to investments and retirement planning, "they lag in their confidence about how to prepare for this phase in life."

Women are apparently aware of the need to be more aggressive about investments, savings accounts and planning for their own retirement. A separate Wells Fargo study found that retirement is the top financial topic women want to learn about. Still, the survey found that women in their 40s were the most likely of all respondents to have reduced their retirement savings accounts since the recession started. They were also the most likely to claim that they can't save more due to other financial priorities.

Women want more help with retirement investments

Women, according to the Wells Fargo survey, were much more in favor than men in proposals that would encourage retirement savings. More than 80 percent of women felt employers should help their workers manage retirement savings. Single women were most enthusiastic about that idea, particularly women in their 20s and 30s.

Three out of four women surveyed felt the government should provide a universal savings vehicle for those who don't have a 401(k). Single women were most supportive but married men were the least supportive of that idea.


Disclaimer:This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

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