American workers with an eye on retirement have got some serious catching up to do.
In the United States, the “retirement-savings gap”––the difference between what a person believes they need to retire comfortably, and how much they currently hold––is growing fast. But among women, the gap is even wider.
In 2020, the American worker’s “magic target” for retirement was $951,000. In the five years since, according to a new survey by Northwestern Mutual, that number has crept up to $1.46 million, in a rate of increase that outpaces inflation.
Meanwhile, the average amount Americans have saved for their retirement currently stands at $88,400.
Retirement gap disproportionately affects women
However, there’s an even more pressing retirement gap appearing in U.S. society, and like many of the other gaps, this retirement gap disproportionately affects women. While dollars and cents may appear indiscriminate on a bottom line, in actual fact retirement outcomes are anything but gender-neutral.
A Goldman Sachs report earlier this year found that 28 percent of women are saving less than $50,000 for retirement. That means that one in four women are living on a paltry $2,000 a year.
This in turn pushes up womens’ reliance on social security benefits, but in a cruel irony, women on average receive 22 percent less in social security benefits thanks to yet another gap: the discriminatory pay gap. Adding insult to injury is the female shortfall in earnings created by part-time work patterns that is imposed by caring responsibilities.
Another reason women retire with less to live on is the fact that they tend to retire earlier than their male cohorts, and often unexpectedly, without the requisite financial planning in place. What’s more, women live on average five years longer than men, so their already-stretched retirement funds need to go even further. All of these disparities combined mean that women, who make up more than 50 percent of the U.S. population, are retiring with anywhere from 24 percent to 30 percent less than the other 49.49 percent.
So what can be done to address the gap?
Not all of the solutions lie with women themselves; this is not merely about changing mindsets or monthly habits. To level the retiring field, the government needs to address provisions for part-time workers, as well as better help with long-term student loan debt. Such measures would positively benefit women.
Look to the pros
A self-empowering measure that could turn womens’ fortunes around is to engage a professional retirement advisor: a small investment that could make a huge difference in the long-term (some employer retirement schemes offer this for free).
A professional can advise about investment management strategies and the use of target date funds, which gear investments toward a projected retirement date and tend to suit women, who tend to be more risk-averse and more focussed on the present than men.
Another powerful measure to improve your retirement outlook is to understand the power of compounding interest. If you’re in the early stages of your career, start your plan as early as possible, and automate your contributions.
And finally, don’t delegate your financial planning. If you’re a woman in a relationship where your partner handles bills and accounts, reclaim your retirement planning for yourself. Statistically, there’s a decent chance you’ll outlive a male spouse, but either way you’ll never regret having influence over your own retirement outcome.
Explore exciting career opportunities that match your skills and aspirations at The Hill Jobs Board.
Director of Sales, Vertical, Spotify, New York
Spotify is seeking a Director of Sales to join its team in New York or Chicago. This exciting role calls for a proven leader in the sales environment, who is at home in the digital media space, preferably with a decade of experience in digital.
You’ll lead advertising sales and nurture client relationships across industries, while also strategizing for top brands. You’ll also collaborate with the Vertical sales head, drive your own team’s performance and represent Spotify at top industry events. This entrepreneurial role has a base salary of $163,225 – $233,179, plus benefits. Find out more, and apply directly.
Director, Enterprise Sales, PayPal, IL
If you have a decade in B2B sales, at least eight years’ experience in leadership and a knack for fostering innovation, PayPal would like you to apply for its Director of Enterprise Sales opening in Illinois.
Your job will be to maximize sales and ROI, drive PayPal’s corporate objectives, hit revenue targets and ensure full compliance as you go. On a personal level, you should be a great mentor and coach for a busy team. This strategic role is described in detail here.
Advisor, Policy & Supervision, Conference of State Bank Supervisors, Washington
Do you have a Bachelor’s, MBA or Master’s-level degree in business or finance and at least 10 years’ of progressive experience interpreting, analyzing, examining, and assessing federal/state financial services laws, regulations, and related issuances?
This Advisor, Policy & Supervision role at the Conference of State Bank Supervisors could be a great fit. Here, you will provide expertise and support to state financial regulators on emerging issues and assist in advancing state regulation and state/federal coordination. This position also requires high-level interaction with senior state and federal banking and financial regulators to support state/federal coordination and to achieve CSBS’s policy and supervision goals. Get all the details.
