Many have heard of the wage gap that exists in the United States; for every man’s dollar, a woman earns 82 cents. Though there have been efforts to make pay equal, many believe the gap will not close until 2059. This is surprising since, on average, women are actually more educated than men, In 2016, 39.5% of women ages 25-29 had college degrees, compared to 32.7% of men (investments and wealth). Despite this, women earn 18.2% less than their male counterparts in a comparable position (CFA). In the 21st century, you might be asking yourself: how does this disparity still exist?
The truth is, there are many reasons for the gap. For one, women tend to take more time off, stifling their growth within companies and pausing their pay. Additionally, women oftentimes do not ask for raises whereas men do. Since women end up making less, they end up having less wealth. This is called the wealth gap. According to the CFA Institute, the median single U.S. man aged 18-64 had wealth of $31,150, whereas his female counterpart had $15,120 (CFA). Something else? The wage gap is said to widen as women progress in their careers, and it’s worse for women of color (Payscale).
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Source: Ellevest
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Source: Ellevest
Secure retirement is important to everyone; saving enough, investing well, and not outliving assets are goals regardless of gender. Unfortunately, wage and wealth gap aside, retirement is much tougher for women. Here’s why.
Women live longer
On average, women tend to live much longer than men. Sources differ in how long, but at age 65, women are expected to live an average of 21.7 additional years. At that age, men can expect to live an average of 19.3 additional years (investments and wealth).
Women are more likely to become caregivers
An estimated 66% of family caregivers are females at age 49. By taking time off work to care for loved ones, women suppress their flow of income. Additionally, women are seen as responsible for care and health-related products, which further eats into retirement funds (investments and wealth).
Women are more likely to be single parents
Out of the 12 million single-parent families in the country, more than 80% are headed by women. Understandably, this puts many mothers under significant financial pressure, presenting an additional hurdle in saving for retirement (investments and wealth).
Though all this information seems daunting, gaps are retirement are closely intertwined. It is becoming more and more difficult for companies to ignore the pay discrepancies in companies, and therefore bridging how women are compensated and therefore how they retire. But the findings are clear: Women have it hard in the corporate world, and colored women even moreso. It is no longer safe to rely on companies to fix themselves. Instead, we have to take action. Even if you are not in a seat of power, there are still things that can be done on your part. For helpful tips, refer to the article “Women: What you can do about the wage gap.”
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