Although more and more women are enjoying long careers and in some cases even making more than their spouses, a new study reveals that women in general fear retirement more than men – and there may be some basis for their fear.
According to a study by The Hartford Financial Services Group, women's worries focus on three major areas: inflation, health and longevity. On average, women end up working 12 fewer years than men for various reasons, and thus tend to have less put away for retirement. Additionally, given that statistically men die younger than women, women have longer to worry about being alone and having to provide for themselves.
In the study, 83% of the women revealed they feared that their purchasing power would dwindle due to inflation, whereas 69% of men had this fear. Declining health had 75% of polled women saying that they were “very” or “somewhat” concerned.
The third issue builds off of the second fear – because of increased life spans, outliving partners, cost of retirement in general and cost of healthcare specifically, 87% of women expressed nervousness concerning retirement.
And that's where these fears tend to be strongly rooted in reality. A study by Hewitt Associates found that women need to save more for retirement than men. Additionally, the study revealed that the gap between the amount women need to save and the amount they are actually saving is larger than the gap for men.
According to the specifics of the study, which examined the projected retirement levels of nearly 2 million employees at 72 large U.S. companies, “both men and women are on track to replace 85 percent of pay at retirement, assuming average life expectancy. However, women, on average, need to replace nearly 130 percent of their final pay at retirement, 7 percentage points more than men. When factoring in differences in longevity, that disparity jumps to 10 percentage points.”
That boils down to 2% - the amount the average woman will need to save more than men, over 30 years, to achieve the same standard of living.
Dr. Bonnie Eaker Weil has been an internationally acclaimed relationship therapist for thirty years. New York magazine named her one of the city’s top therapists and Psychology Today named her one of America’s best therapists. Her most recent book, Financial Infidelity, is available on Amazon.
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