How the $139K Gap Between Men's and Women's Retirement Hits a Monthly Budget
The gender gap at work continues even when work itself does not.
According to some of the latest research from ZipRecruiter, women face an especially difficult retirement savings crisis. The data showed women 60 years and older have a median of $60,000 saved. Men of the same age group have a median of $199,000 saved. In addition to that whopping $139,000 gender gap in savings, 28% of women 60 years and older have zero savings, compared to 16% of men in that age group.
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At a basic level, the math for a typical retiree could show the $139,000 gap meaning a few hundred dollars each month less for a woman. It’s an amount that can easily hurt a monthly budget and mean the difference between having some money left over after essentials or barely making the rent and food bill. The financial pros who talked to MoneyLion said the numbers are less important than a retiree’s own overall money situation.
Questions To Ask Yourself About Retirement
“There’s no simple way to say this savings gap equals a certain amount less per month,” said David Kon, CEO and founder of WealthFluent. “It depends on how long you need that money to last, your other sources of income, your expenses and what happens in the market.”
According to Kon, that’s why he thinks it’s more useful to look at your entire financial picture rather than one savings number. Here are some of his suggested questions:
What do you have saved?
What will you get from Social Security?
Do you have a mortgage, pension or other investments?
What do you actually expect to spend in retirement?
“Once you put all of that together, you can see what the gap really means for you and whether your money is likely to last,” Kon said. “The averages are helpful context, but ultimately, your own numbers are what matter.”
Factors To Consider When Planning for Retirement
According to Marguerita Cheng, certified financial planner (CFP), CEO of Blue Ocean Global Wealth, this retirement savings gap can mean the difference between getting ahead and getting by.
“Every woman, no matter her age, stage or relationship, deserves to be financially confident, empowered and secure,” she said. “We can’t address an issue if we don’t even know it exists.”
Cheng and other experts said that women are more likely than men to have breaks in employment for family caregiving responsibilities, and that women are also less likely to have access to employer-sponsored retirement plans.
“This doesn’t suddenly become a problem at retirement,” Kon said. “Lower pay, career breaks and fewer years of contributions can start creating that gap decades earlier, and those differences compound over time.”
Speaking of time, it’s also important to note that women, on average, live longer than men. A longer retirement period means more money is needed to cover life expenses.
“Women live longer than men on average, so while a $139,000 gap may be significant with all factors equal, it has an even greater impact when retirement savings must last an extra five to seven years,” said Melanie Musson, an insurance expert with Quote.
Taylor Kovar, CFP, cofounder of UseKlear.com, said sometimes the difference between a man and a woman when it comes to retirement savings can play out to where it means being able to cover bills comfortably versus needing to think twice.
“From what I've seen, couples who plan for retirement together with both people involved often feel more prepared later on,” he said.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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