The United States has a retirement savings crisis.
That crisis is much worse for women, who on average have less saved up for retirement and live longer than their male counterparts.
Women save less for retirement largely because they earn less over their lifetime. This passage is from a post on financial planners who target female clients at Financial Planning:
Female college graduates initially earn around $US31,900 on average, while their male counterparts earn around $US40,800, according to recent data from compensation research firm PayScale. As women and men grow in their careers, both genders see a salary growth of around 60% by the age of 30.
However, the growth rate shifts at the age of 30, slowing for women, while continuing to rise for men. By the age of 39, the average woman’s income has grown by less than 20% in those 9 years. For men, income grows by around 45% by the age of 48.
On average, women’s pay peaks at age 39, with a median income of $US60,000, according to PayScale’s research. Men, on the other hand continue to see salary growth until the age of 48, with a median income of $US95,000.
In the Washington Posty, Sallie Krawcheck argues that Americans need to completely rethink our retirement problem, and therefore the solutions:
By looking at this issue through the gender lens, the solutions take on a decidedly different character. They become less about an inevitable, looming wealth transfer and more about increasing the economic engagement of women. And thus the focus of the national discussions about advancing women in the workplace, the focus moves from we-should-do-this-because-it’s-the-fair-thing-to-do to we-should-do-this-because-it-helps-solve-a-ridiculously-large-problem.
It’s unclear that focusing on women in the workplace is the entire solution — even without women’s lower retirement savings there would still be a large gap between what people need to retire on and what they have saved/what is funded by entitlement programs.
But getting women to equal pay is certainly a start.