A survey released Thursday by LIMRA found women save 40% less than men for retirement. The average balance in defined contribution plans for women 50 or older is lower than men of the same age by about $63,000, the report found. While the deferral rate is higher, they are more likely to earn less than men, including their spouses. Women younger than 50 are more likely to earn the same as their spouse than women older than 50.
"Women's average defined contribution (DC) plan balances are only 60% of men's average balances," said Cecilia Shiner, senior analyst, LIMRA's retirement research. "This is especially concerning because women live longer than men and thus need more retirement savings. In addition to a longer average lifespan, women are more likely to have work disruptions for caregiving that hinder their capacity to save. Therefore, they need to capitalize on savings opportunities while they are working."
Across all age groups, men were more likely to consider retirement as the main reason for saving. "This finding suggests that women are less inclined than men to prioritize and take on the responsibility for retirement saving," according to the report.
Further contributing to women's low savings rate is a "relative lack of knowledge" regarding retirement products and services, the report found. Just 14% of women consider themselves "knowledgeable" about financial products and services, compared with 29% of men. The report found that regardless of gender, employees with similar levels of understanding were also similar in their behavior toward retirement planning.
"As an industry, we have to do more to educate women on the importance of retirement saving and planning," said Shiner. "Companies can help employers provide the tools and information to encourage them to participate in their DC plans and become more involved in the financial decisions surrounding their retirement."
A report from the Insured Retirement Institute in late January called women an "untapped market" for retirement.