Women tend to save less for retirement than men, despite the fact that women now enjoy more financial power than ever. Thirty-six percent of all U.S. businesses are owned or led by women, according to newly released findings by Merrill Lynch.
Merrill cites a number of sources — including the National Women’s Business Council for the aforementioned statistic — to conclude that women should start saving more. Merrill also cites stats by The World Bank, which predicts that women’s earnings globally will reach $18 trillion by 2014.
According to the U.S. Census Bureau, the current life expectancy for a woman is 80.5 years, while it’s 75.5 years for a man, Merrill states. “While longevity continues to increase for both sexes, the U.S. government projects that the longevity gap between men and women will exist for the foreseeable future,” Merrill notes.
That longer life expectancy means that women may need more income than men do to last through their retirement years.
“Despite their growing economic might, women still have a more difficult road to a secure retirement than men,” notes Debra Greenberg, director of IRA product management at Bank of America Merrill Lynch.
Hurdles, she says, are that women still make 80 cents for every dollar earned by men and that they are much more likely to interrupt their careers to care for a child or a parent, which can result in a reduction in both wages and Social Security benefits.
Other retirement hurdles include divorce, which tends to have a bigger financial impact on women than on men.