A recent study measured the retirement savings divide between 45-year-old men and women. It found that women, on average, are more than $268,000 short of what they need to retire comfortably at 65. For the average man, it's $212,000. For every $100 a man sets aside, a woman needs to set aside $126. That's a 26 percent gender gap.
What can be done? Women need to begin their retirement planning all the earlier, to determine what goal would realistically suit them (most people don't even run projections). While estimating future expenses is hard, the websites of large fund companies have calculators to help investors figure it out, and better planning tools are showing up on more 401(k) plan sites.
For the study, Financial Finesse analyzed data on median income, retirement savings, life expectancy, 401(k) salary deferral rates, and projected health-care costs to find out how much men and women would need to save to retire at 65 and live on 70 percent of pre-retirement income.
"Lower
Social Security benefits, longer life expectancy, and lower retirement
savings balances because of lower-paying jobs all compound into this
incredibly large shortfall for women," said Gregory Ward, a senior
financial planner at the company.
Culled from Bloomberg.com
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