The Truth Behind Why Women Save Less for Retirement than Men

by | Jun 10, 2019

Recent studies show that women are saving less towards retirement than men. While some of these reasons can be vague — there are practical, real-life implications behind why women save less towards retirement than their male counterparts. Here are a few factors that can affect women’s retirement savings rates.


The Wage Gap

The disparity in salary between men and women is a continuously pressing issue in the United States and one that doesn’t appear to have a definite end in sight. Women earn 79 cents for every dollar that men earn, and the numbers are even lower for Black and Hispanic women (who earn 74 cents for every dollar).

While many career coaches and professional experts advise women to negotiate their salaries more frequently, the truth is that women are already negotiating— but just aren’t getting what they ask for. Studies have shown that even when women do ask for a raise, they are turned down at a higher rate than men.


Gender Housing Gap

The issue of the wage gap essentially creates a domino effect that leads to discrepancies between genders in housing costs. While there are no blatant causes to pinpoint, it comes as no surprise that when women make less money than men, they also have less money for a mortgage or rent.

A 2017 study found that women earning the average income while living in the country’s most expensive cities are forking over anywhere between 30-53% of their income towards rent. (And nearly 70% on the average income for a one-bedroom apartment in Santa Ana, California!) Meanwhile, men earning the average income in the same cities are paying  21-36% of their pay.


More Women are Breadwinners

While women earn less, they are increasingly taking on the responsibility of providing for their families. Currently more than half of American women are the breadwinners in their household. About the same number of women (52 percent) say they are “very worried” about their financial futures.

For women breadwinners, the responsibility of providing for themselves and their families is challenging. The financial stress that comes with being the breadwinner, can make it difficult to plan for the future when there are more immediate expenses to focus on.


Women Pay (Literally) for Personal Safety

In nearly every single country, women walk disproportionately fewer steps than men.  No, not because they don’t feel like it. But because personal safety is a primary concern in cities around the world when walking alone.

To avoid harassment and assault from strangers, several women revealed that they instead opt for share-riding services or forms of public transit to avoid potentially dangerous situations.

While cab and train rides may be relatively minor everyday expenses, these costs add up. Combined with other expenses such as security alarms and higher rent costs to live in safer areas, women may have to compromise financial gain for personal safety.


What Can Be Done?

The statistics are pretty bleak, and if you’re a woman, you may be feeling a bit lost. But don’t give up hope yet. While women have a steeper hill to climb and saving enough for a comfortable retirement can be challenging, it’s not impossible.

Start by setting up an automatic retirement contribution, even if it’s $5 per paycheck, that can grow over time.

Investing platforms like Acorns and Ellevest are convenient and easily accessible tools to use for retirement savings. Acorns has a round-up feature that allows users to put the spare change from everyday purchases into an investment account, which is another small and painless way to set aside retirement savings. Ellevest is specifically focused on empowering women to invest and offers resources with the goal of ensuring that women save to enjoy a secure retirement.

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