Retirement saving: Women vs. men, and more surprises

A new study of 9 million Americans who have access to workplace defined-contribution plans, such as a 401(k) or 403(b), found that even though only 2 percent of them consider retirement savings to be their most pressing economic issue, 60 percent of full-time employees contribute to these plans.

The study, done by ADP Research Institute, also found that women are more likely to save than men, and they're saving a higher percentage of wages.

"Factors such as lower incomes and time spent out of the workforce still put women at greater risk of not achieving a secure retirement," said Ahu Yildirmaz, head of the institute. "But efforts by financial advisors and agencies to raise awareness among women of the importance of saving appear to have made an impact."

The difference in average savings data looks modest -- overall 61 percent of women and 60 percent of men are saving, but what skews this picture is that women are disproportionately represented in lower-wage jobs. When you control for income, the gender gap becomes far more noticeable.

Among women and men earning $80,000 to $100,000, for example, 80.6 percent of the women are saving versus just 74.1 percent of men. These women are putting aside 8.2 percent of their income, while the men saved 7.5 percent. In fact, at every income level, women are saving more, and more consistently.

Other study findings:

Workers tend to wake up to the need for retirement savings as they age. While just 48.4 percent of workers between the ages of 20 and 29 were saving, 65.6 percent of pre-retirees in the 50- to 60-year-old group were saving. The percentage of income contributed to retirement plans also rises with age, with just 4.9 percent of wages going into twenty-something plans, while workers over 61 contributed 9.2 percent of their salaries.

Contribution rates also vary markedly by industry and company size. Employees of information services companies were the most likely to contribute, with 76 percent participating in a plan and contributing an average of 7 percent of their wages.

Hospitality and leisure companies, on the other hand, reported the worst participation rates, with just 37 percent of workers opting to contribute to retirement savings, and then at just a 6.3 percent rate. The second-worst industry for worker participation was construction, where 45 percent of workers set aside an average of 6.6 percent of pay.

Employees of small companies are less likely to contribute to workplace savings plans than employees of big companies. At companies with less than 19 employees, just 32.5 percent were saving. But at companies with more than 5,000 employees, 65.7 percent were saving.

The relative few who do contribute at small companies are saving more, however. The average saver at a small company set aside 7.5 percent of wages, versus 6.7 percent among employees of giant firms.

Here's a finding that comes as no surprise: The more you earn, the more likely you are to save. While just 37.5 percent of the 40- to 49-year-olds who earned $30,000 or less were saving, 85 percent of this group saved when they earned $200,000 or more.


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