While generally, Americans aren’t that great at saving for retirement, men and women don’t save for retirement in the same way, either. This is largely related to a significant gender pay gap that persists after all these years.
As GOBankingRates recently reported, women are still not earning the same as men — only about 82% of what men earn, and as much as 21% less over a lifetime. This is not only problematic in and of itself, but because women tend to retire two years earlier than men, due to reasons “outside of their control,” meaning they actually need more money in retirement. Those reasons may be health related or related to caregiving an ailing spouse, none of which comes cheaply.
To find out more about the difference in average retirement savings between men and women in 2023, GOBankingRates surveyed 1,091 Americans aged 18 and older from across the country. The survey asked twenty different questions related to how they pay bills, whether and how they’ve saved, and much more about their spending habits. Here are some key highlights in the differences of men and women’s retirement savings and other financial information.
People Put Off Saving For Retirement
It’s very easy for people to put off saving for retirement because it seems so far away when you’re younger.
In fact, most Americans of all genders are not prepared for retirement based on what experts suggest they need to have socked away.
The GOBankingRates study found that just shy of 10% of all survey respondents were able to save between $1,000 and $2,000 in the past year.
Even people with work-sponsored 401(k)s don’t necessarily have enough saved. Market Watch found that people in their 50s had an average of $183,000 in 401(k)s when experts estimate they need closer to the million or more mark to comfortably retire.
How Much Did Men and Women Save for Retirement in 2023?
While women actually saved almost 5% more than men in the smallest category of $0.01 to $1,000 put into savings this past year — 25% for women, and 20% for men — when it came to the largest sum category of $10,000 or more, men significantly out-saved women, 3% to 7%.
Who Has the Least Retirement Savings?
When it came to people who just didn’t have any retirement savings or investments, women were almost 10% more likely not to have any safety net at all, (or 25% to men’s 15%).
In starker figures, 56% of women reported having less than $10,000 in any form of retirement savings than men, at 48%, a difference of 8%.
Those whose savings decreased significantly, by over 50% in the last year, were also more commonly women. Women’s savings in this category decreased by 7% compared to 6% for men.
Food Stamps and Cost of Living Increases
Surprisingly, a smidge more men, by less than 1%, were currently enrolled for food stamps, a part of the Supplemental Nutrition Assistance Program (SNAP) offered by the Federal government to people with low incomes who need help supplementing their food budget.
And almost 6% more men reported that the cost-of-living increase from 3% to 8.7% this year would affect them.
This may be due to the fact that since men still earn more money than women, they could be considered “head of household” and may pay the bills more frequently.
How To Get Started Saving
The good news is that it’s never too late to start saving and investing in your retirement.
High-Interest Savings Accounts
For people who don’t have retirement accounts, a good starting point may be a high-interest savings account. This way, your money doesn’t just sit around and drag behind the rate of inflation but instead earns a decent interest rate.
Some banks are offering as much as a 5% interest rate, but you may want to shop around.
401(k) Account
If you aren’t sure if have an employer-sponsored 401(k) retirement account, check in with your employer to see if it’s an option. These accounts allow you to put money in with a bit of a tax deduction, and your money will grow by being invested in various stock market and mutual funds.
If you do have one, make sure you’re getting any matching funds that your employer offers, as well.
Open an IRA
If you have no employer-sponsored 401(k) and you’re not self-employed, you can open an individual retirement account, or IRA. You get a tax deduction on some of the funds you sock away, and don’t have to pay taxes on the interest it earns until you take money out.
A Roth IRA doesn’t give you the up-front tax deduction, but you won’t pay taxes on what you take out by age 59 & ½, so long as you’ve had the account for five years.
By being strategic and aggressive in your retirement savings approach, women can try to make up for the shortfalls that the pay gap has created.
