Despite Wage Gap, Women Are Better At Saving For Retirement

By Ryan Velez

A short time ago, we put out an article saying that women, Black women in particular, need to focus on retirement savings more than men, due to the wage gap meaning that they need to save more earlier to get the same results as their counterparts.

Interestingly, an article from Black America Web shows that despite having less money to work with on average, women are doing a better job of saving their money than men for retirement.

The study comes from Fidelity Investments client data and showed that women earned 0.4 percent higher returns (9 percent versus 8.4 percent) and save a higher percentage of their paychecks per year than men on average. The article explains this is due to the fact that women are simply more aware of retirement issues than men, but are also more concerned about it. In one recent survey, only 7% of women said they were “very confident” about being able to retire with a comfortable lifestyle, and 43% of women said they expect to work past age 70 or to never retire.

As a result, actions and strategies regarding retirement differ along gender lines as well. Women are more likely to plan ahead, creating goals. They also tend to buy and hold stocks, as opposed to moving quickly during market fluctuations. Fidelity’s results showed that women tend to have a more age-based allocation of investments than men. It also came out that fewer women have their savings fully invested stocks than men, and women are more likely to invest in target date funds, ensuring they are well diversified. However, the wage gap means that this planning doesn’t always result in better results in retirement years.

Other findings in the report showed that women have a deep hunger for financial education. Over 90 percent of women said they want to learn more about financial planning. Part of this stems from the fact that women point to their parents as the top source of financial advice, but only 20% find their parents effective in that regard. This may be even more applicable for black women, who statistically are less likely to come from families of wealth. However, while they want this help, they are also less likely to seek it out, with six out of 10 saying they have never consulted with a financial professional.

Comments