14% of Women Expect Never To Retire — The Investment Gap Holding Them Back
Women are far less likely to feel confident about retirement than men. A recent survey from Kickresume found women are twice as likely as men to expect never to retire (14% versus 7%). This gap is surprising, given that women report many of the same financial habits as men, including regularly saving money and contributing to retirement accounts.
Below, we'll take a closer look at what could be holding women back from a secure retirement.
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Women Save at Similar Rates, but Feel Less Prepared for Retirement
When it comes to many important financial behaviors, women are keeping up with men. According to the survey:
48% of women and 47% of men are saving money regularly
39% of women and 40% of men are contributing to a pension
33% of women and 31% of men are paying off debt
Yet, women are twice as likely to believe they'll never retire.
“The fact that women often earn less than men is likely central here," said Peter Duris, CEO and cofounder of Kickresume. "Saving, contributing to a pension or paying off debt at the same rate doesn't mean the same amount — if the underlying income is smaller to begin with, identical habits still add up to less money over a working lifetime. That gap compounds every year it persists."
Duris said several factors may contribute to that earnings gap. He pointed to research showing women can take longer to reach executive roles, and also noted that women in Kickresume's research were less likely to report receiving a raise and more likely to feel apprehensive about negotiating a higher salary when accepting a job offer.
Women Are Less Likely To Invest for Retirement
Lower earnings may explain part of the retirement gap, but the survey found another notable difference — women were significantly less likely to invest:
39% of women and 47% of men are investing in stocks, ETFs or funds
17% of women and 25% of men are investing in property
That's an 8-percentage-point gap for both investment categories.
“Investing in financial assets or property can be a fantastic way to build your retirement fund," Duris said. "Money that’s tied up in this kind of investment can grow a lot faster than money in a standard savings account. Since men and women save at nearly the same rate, investing less — and in slower-growing ways — is a plausible reason why the same effort produces a less secure outcome by retirement age."
A separate Kickresume survey found women were notably less likely to say that they’d invest the extra money if they got a raise (26% versus 37% of men).
"It could be that women are on average a little less comfortable with investing, as women were more likely to say they’d rather use a savings account (27% versus 20%)," Duris said.
How Women Can Build a Stronger Retirement Plan
One-quarter of women (25%) expect to work past age 70 versus 21% of men, but there are actions that women can take now to retire on time.
Investing is one lever to consider.
"Our research found women are less likely to invest even though women save at nearly the same rate as men," Duris said. "Investing rather than only saving is one practical way to close that gap, since invested money tends to grow faster over time than money sitting in a savings account.”
Women should also focus on increasing their salaries.
"Twenty-five percent of respondents said the single biggest thing that would help their retirement is earning more money now — and negotiating a raise is one of the more direct ways to act on that," Duris said. "Keep a running list of your achievements and back them up with evidence so the case for a higher salary is concrete. If a raise isn't realistic where you are, it's also worth watching for similar roles elsewhere that pay more — just hold onto your current job until something else is lined up, especially in this job market."
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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