Survey Says Women lagging in retirement saving

Some concerning statistics for American women when it comes to retirement readiness were released by BlackRock last week.  In nearly all instances, women lag behind their male counterparts in savings, and further exacerbate the issue by their conservative approach to investing. In the firm’s Global Investor Pulse Survey of 27,000 investors worldwide, including 4,000 Americans, they found:

  • 53 percent of working-age American women have started saving for retirement, compared with 65 percent of men.
  • The women who do set money aside fail to invest for growth, which further erodes their future returns; according to the results, the average female investor keeps 68 percent of her portfolio in cash and cash equivalents, such as money market funds, Treasury bills and certificates of deposit, which have a low-risk, low-return profile. By comparison, men allocate 59 percent of their portfolios to cash.
  • Some 28 percent of those surveyed indicated they are willing to assume higher risks to achieve higher returns, compared with 45 percent of men. Indeed, risk-aversion among female investors runs disproportionately high.
  • Much of the gender savings gap is attributed to women's role as the primary caregiver. Women spend fewer years in the workforce on average, putting their careers on hold or taking part-time jobs to take care of young children or aging parents. During those years, they are generally ineligible for company retirement plans and miss out on matching contributions.
  • Women tend to close the savings gap in their later years when they return to work, but by then the benefit of compounded growth is largely lost.
  • American women age 55 to 64 with retirement savings have accumulated an average of $81,300 compared with $118,400 for their male counterparts, the survey reveals.
  • Single females on the verge of retirement (early baby boomers) have a savings shortfall of nearly $63,000, while single males of the same age group have a deficit of $34,000.