Women Face Financial Woes In Retirement

By Hugh R. Morley
The Record (Hackensack, N.J.)

More women than men save for retirement, and women save a larger share of their earnings, but they will still likely be worse off when they retire because they earn less and spend more time out of the workforce, a new study says.

The study of the savings rates of about 9 million U.S. employees found that about 60 percent of the workers saved at a rate of about 7 percent of their earnings, according to the study released Monday by ADP Research Institute.

Most women, 74 percent, saved at an average rate of 7 percent, while most men, 66 percent, saved at an average rate of 6.4 percent, the study found.

Across most wage categories, women saved at a higher rate than men, and workers save more as they approach retirement, said the report by the institute, which is part of Roseland-based ADP.

However, women are at a greater risk of having an insufficiently large nest egg when they get to retirement, the report concluded.

One reason is that they earn less, so that although the proportion of their earnings is larger than men’s, the dollar value is less, the report said.

“Factors such as lower incomes and time spent out of the workforce still put women at greater risk of not achieving a secure retirement,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute.

“But efforts by financial advisers and agencies to raise awareness among women of the importance of saving for retirement appear to have made an impact.”

The study also found that employees of larger companies tended to save at lower rates than those of small businesses and that the rate of savings across the board went up as retirement approached.

For example, fewer than half the employees in the 20-29 age group saved, compared with 65 percent in the 50- to 60-year-old group, the report said.

“This data reinforces a lifetime savings pattern: As retirement nears, more employees attempt to “catch up” on their savings,” the report said.

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