Financial Wellness Programs Gender Savings Gap

Can Financial Wellness Programs Help Women Bridge the Gender Savings Gap?

Updated on Mar 06 2019

Financial experts are seeing a large gender gap when it comes to investing and saving for the future - and it can be a huge problem for senior women preparing for retirement. Learn more about the gender savings gap and how financial wellness programs can help bridge the gap.

March is Women’s History Month, and it is also a time to take a closer look at the social, physical and financial issues facing women today. One such issue is the gender savings gap. Learn about the gender savings gap and how there are financial wellness programs to help women get prepared for their futures.

Exploring the Gender Savings Gap

A 2015 study by Forbes Insights and Northwestern Mutual found that women have a bold confidence in handling important personal matters. In fact, according to the study, nearly 75 percent of women feel they can achieve fulfilling relationships, raise happy children and pursue their own social values. However, that sense of confidence lags when it comes to financial security. Only 27 percent of women reported that they feel confident they will achieve their financial goals.

Unfortunately, their feelings may not be far off from reality. There is a very real and substantial gender gap when it comes to retirement savings. A 2016 study from the National Institute on Retirement Security (NIRS) found that women are 80 percent more likely than men to be impoverished in retirement. The study also found that:

  • Women between the ages of 75 and 79 are three times more likely than men to be living in poverty.
  • Women were more likely to work for employers that offer retirement plans but women’s higher rates of part-time employment and shorter job tenure limit their eligibility in these programs.
  • The percentage of women working for employers that offered only defined contribution retirement plans decreased from 49 percent to 46 percent from 2009 to 2012.
  • The median value in women’s retirement accounts was one-third less than mens.
  • On average, women have 26 percent less income than men in retirement.
  • Women over the age of 70 who are widowed or divorced rely on Social Security for a majority of their income.

Unique Retirement Planning Needs Facing Women

Additionally, women must face unique issues that affect their retirement planning. From longevity to increased family responsibilities, the myriad of decisions that women make can have a lasting impact on financial security.

On average, women live until 86.6 years old while men live to be 85.3. Because women live longer, they need their retirement money to last longer. One of of every four women who are 65 or older will live past 90 and one out of ten will live past 95. Not only will women need money to last longer to meet daily life expenses, they are also more likely to need long-term health care because of their longevity. This is a major expense that many women are financially unprepared to handle that needs to be factored into their investment time horizon.

Additionally, many women are chronic multi-taskers. From being an employee to a wife, a mother, a caregiver, a volunteer and managing the activities of children and family obligations, it is easy to prioritize the here and now - leaving the future to be handled in the future. Women also tend to experience more interruptions in their careers to care for family and have children. While a positive life experience, time away from work leads to less income, less investment opportunity, and fewer retirement savings.

Fixing the Gender Savings Gap

There’s no simple answer to why the gender savings gap exists - and there’s no easy way to fix it. However, there is evidence that financial wellness programs can help.

A 2017 study from the Center for Retirement Research at Boston College involving 31,000 workers found that financial wellness and education can reduce the gender savings gap by more than 50 percent. The study suggested that differences between men and women in financial knowledge and motivation were a large contributor to the gender gap in retirement savings.

Additionally, Financial Finesse, a workplace wellness company, found that pairing educational programs with financial mentorship and coaching also helped to close the gender savings gap. Their study also found that it is to the company’s advantage to provide these programs, increasing employee satisfaction and lowering turnover. Financial wellness programs that prioritized person-to-person coaching, with technology in a supporting role helped narrow the financial gender gap. Interestingly, employees who had at least five interactions with a certified financial planner or advisor showed substantial progress in retirement savings.

Have you seen financial wellness programs help you in your retirement planning? Contact a fiduciary financial advisor today to conduct a financial assessment and understand how to close the gender savings gap and be confident in your retirement goals.

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