Women – It’s Time to Close the Retirement Gap!

Published on May 19, 2014

In spite of women saving more than men for retirement in general (more of them are saving a larger share of their income), indicators point to a big gap in their ability to enjoy a financially comfortable retirement as opposed to their male counterparts.

A study by ADP Research Institute revealed that 74 percent of women saved, on average, 7 percent of their earnings; 66 percent of men saved at an average rate of 6.4 percent. So women are saving more than men but they are more likely to have insufficient retirement savings. This is because in general, women earn less over their lifetimes.

A few other factors mitigate women’s retirement savings:

• Women outlive men by six years on average, so they will have a longer retirement period and therefore need more income to support themselves.
• The earnings gap between women and men is big (although it differs from state to state). An article in Huffington Post in March 2014 cited data compiled from the Census Bureau, Department of Education, and Bureau of Labor Statistics that showed women are paid 23 percent less than men on average.
• Many women are in and out of the job market due to family issues – raising children, caring for elderly parents – and therefore change jobs more frequently or are unable to build up a consistently upward salary ladder.
• This makes it difficult to become vested in pension plans (which are slowly disappearing from corporate benefits packages).
• The Social Security fund’s future is insecure and it is not meant to be a person’s sole source of retirement income. In 2012 the average benefit for women was $1,023 a month.

Therefore, women will have a lot of catching up to do as they near retirement age. Speaking of catching up, the ADP study also found that fewer than half of younger employees in their 20s were saving for retirement while 65 percent of older employees (50-65 years old) were saving.

Financial journalist Jean Chatzky cited a 2012 study by Financial Finesse that stated only 43 percent of women had an emergency fund in place but 63 percent of men did. When it came to retirement plans, Chatzky said about half the men surveyed reported rebalancing their investment portfolios but only a quarter of women did so.

Rebalance your IRA through self-direction

For savvy investors who understand the investment markets and want to make all their own investment decisions, a self-directed retirement plan can provide the fuel needed to ramp up savings and close that retirement gap. A self-directed IRA makes the investments which can include a broad array of alternative assets such as real estate, commodities, precious metals, unsecured loans and so much more. Are you looking to catch up on your retirement savings? Do you want to find out more about how a self-directed retirement plan can help you save for a more comfortable future? Our friendly professionals are here to help. Contact Next Generation Trust Services for information or check out our website (https://www.nextgenerationtrust.com/ira-education/self-directed-iras/) to get started on controlling your future, today.