Women Need to Save More For Retirement Than Men

What’s easier to talk about — money or your own death? Strangely more women pick death.

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In fact, 61 percent of women said so in a joint study from investment firm Merrill Lynch and Age Wave, a research firm focused on issues related to the aging population.

And avoiding money talks is contributing to a “wealth gap” between men and women.

“As women are at a tipping point to achieve greater financial empowerment and independence, it is even more essential that we support women in helping them pursue financial security for life,” says Lorna Sabbia, a Merrill Lynch executive. “This includes encouraging women to invest more of their assets, save earlier for retirement, and pursue financial solutions that closely align to their personal values and life paths.”

Investing in a longer life

Debt.com has previously reported on the “investment gap” that’s holding women back from retirement and becoming millionaires. Now this study tells us women’s lack of confidence in investing will cost them their golden years.

Women are confident in all other matters related to their finances but investing, the study says. They keep pace with men on budgeting, saving and paying bills. However there’s an imbalance between the sexes on who’s more confident in managing investments.

Only 52 percent of women say they’re confident in managing their investments, while 68 percent of men say the same. This is a trend Debt.com has reported on several times in the past few months.

Women live five years longer than men on average, according to Merrill Lynch’s study. And 84 percent of 100 year olds are women while 64 percent of women say they would like to live to 100. However, 44 percent of women worry they’ll run out of money by age 80. Everyone should take into account longer life expectancy when planning retirement, but mostly women, the study says.

Forty-one percent of women say not investing more is their biggest regret financially. The reasons why women don’t invest more? Sixty percent of women cite lack of financial knowledge and low confidence (34 percent) held them back from investing more.

But out of the women who do invest, 77 percent say they’re confident they’ll have enough money to support themselves their whole lifetime.

Not just a pay gap

Women earn 80 percent of what men do, according a report from the Transamerica Center for Retirement Studies. But it’s not the only financial “pay gap” between sexes.

Overall earnings, investments, retirement savings and other assets, all make up what Merrill Lynch refers to as the “wealth gap” in their study. By retirement age, women miss out on $1,055,000 less than their male counterparts. And there are multiple factors contributing to this gap.

One being, women are more likely to be a caregiver to a family member. And that’s not just children, but a spouse, or elderly family member, also. One in three mothers say they took on a less demanding job when they returned to the workforce after having children — which resulted in less pay. And 21 percent say they received less pay for the same job when they returned to the workforce.

Aside from taking care of others, women need more saved to take care of themselves. Women pay $195,000 more for healthcare than men due to longer life expectancy. Which Debt.com has previously reported that healthcare costs in retirement add up to $260,000 for the average American.

Read more on our website…

Originally published at www.debt.com on May 30, 2018.

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