A new study from Financial Finesse, The State of US Employee Retirement Preparedness, reveals that only 17% of women are confident that they’ll be able to reach their income-replacement goals in retirement.
The good news is that 17% is an increase from the 13% reported in the same study last year. The bad news is that percentage is still well below the percentage recorded among men.
Liz Davidson, CEO and Founder of Financial Finesse explains:
“There are a multitude of reasons why women are at higher risk than pre-retirees. On average, women contribute about 6.9% of their pay into retirement savings and have an average retirement plan balance of under $60,000. This is highly concerning when you consider the challenges women face, including lower wages, smaller retirement plan balances, longer life spans, caring for their families, higher health care costs, and a host of other things. In 2013 we did see women improve their retirement preparedness, with 17 percent indicating they are on track to retire versus 13% last year, but they still lag men by nine percentage points when in reality they need to be more prepared simply because they will face more challenges.”
Following are some additional findings from the new study:
- Employees’ retirement preparedness is improving, largely due to better investing behaviors and marketing appreciation. However, employees are not making improvements to their savings behaviors (an important factor in ultimately achieving retirement security).
- Millenials are at significant risk of not being able to achieve retirement security. Only 17% of millenial employees reported that they are confident they’re on track to retire with 80% of their income (or their goal).
- Along with women, lower-income employees (those with annual household incomes of $60,000 or less) are at high risk. A smaller percentage of lower-income employees reported participating in their 401(k) plans in 2013 (84%) than in 2012 (86%), and a smaller percentage feel confident in their ability to reach their income-replacement goals in retirement (10% in 2013 compared to 11% in 2012).
You can follow the link above to read the full report, and see the full Q&Q with Liz Davidson here.