More than half of Americans are worried they will outlive their retirement savings, and research shows that women are more at risk of outliving their savings than men. According to the World Economic Forum, many American women will live more than 10 years past the end of their savings, compared to 8 years for men.
There is a significant shortfall between the savings amounts women have compared to men. One reason is women, on average, live longer than men. However, gender income disparity is another significant factor. For example, according to the U.S. Bureau of Labor Statistics, in the first quarter of 2022, women who were full-time wage and salary workers had median weekly earnings of $937, which is 84 percent of the $1,118 median salary men earn.
Many people expect their Social Security benefits to provide most of their retirement income. That benefit is based on a person’s 35 highest earnings years. The fewer years you spend in the workforce, the less you will receive in Social Security benefits. Since women are more likely than men to take time out of the labor force to care for children and elderly parents, those years without a paycheck will count as zero in their Social Security benefit calculation.
Women and men also differ in the way they save, invest, and use credit. Studies show that although women tend to save more than men and are more likely to pay off their credit card balance each month rather than carrying a balance, they gravitate toward more conservative, lower-risk investment options.
Investing time into improving your financial literacy can help you make sound financial decisions for the future. GNO FCU has many resources to help you. Stop in or call to speak with one of our financial professionals to review your current retirement savings plan and learn how you can ensure a comfortable retirement.