Study: Women Not Saving Enough

With Longer Life Spans Than Men, Women Aren't Doing Enough To Ensure A Comfortable Retirement

(AP)  Women may not earn as much as men or fly up the corporate ladder as quickly, but they get the last laugh since they live longer. Right?

As it turns out, women probably aren't saving enough to bankroll those extra years in style. They invest more conservatively, start saving later and are more likely to be in and out of the work force, according to a study released Wednesday by Hewitt Associates, a human resources consulting firm.

Suddenly, retirement isn't looking so rosy.

Women live an average of 22 years after retirement versus 19 years for men and medical costs are rising, so women will need to save 2 percent more than men every year over 30 years to maintain their standard of living upon retirement, the study found.

The importance of saving didn't dawn on Jerre Laughlin until she was in her 40s and started working in human resources.

"I was looking at pensions all day and was seeing what happens to employees who don't save. That's when reality set in," said Laughlin, now 63 and a resident of Kansas City, Kan. She's been playing catch-up since and doesn't plan to retire until she's 67.

Laughlin isn't the only one who's learning her lesson the hard way. The Hewitt study found women today still do worse by every measure: they start saving later (by two to four years), invest less (7.3 percent versus 8.1 percent) and are in and out of the work force more often for family reasons - gaps that can result in hundreds of thousands of dollars in missed earnings, raises and benefits.

The study looked at the projected retirement levels of nearly 2 million current workers of varying ages at 72 large U.S. companies and used actual employee balances.

"Women tend to be a little more risk averse, more fearful of losing money," said Alison Borland, an author of the study.

Women's saving habits haven't improved significantly over the past several years, either, Borland said.

The study also found a quarter of women didn't contribute at a high enough level to take advantage of the company match, which is typically 50 cents for every dollar up to 6 percent of pay. On average, women earned $57,000 versus $84,000 for men.

Yet women will have longer retirements than men by an average of three years. Socking away more now can improve the quality of those extra years.

If a woman who earns $57,000 a year boosts her contribution from 2 percent to 4 percent - an extra $95 a month - she can save an extra $81,000 by the time she retires, according to the study. That doesn't include her employer's matching contribution.

Delaying retirement can have a big impact too; every additional year is more time earning and less time sapping savings.

One of the biggest missteps people make is cashing out plans when switching jobs; that wipes out 30 percent or more of the account's value in taxes and penalties.

Not surprisingly, the study states 90 percent of women were unsure about managing their finances. It also found that more companies are offering investment guidance, however.

Overall, four out of five men and women aren't saving enough to keep up the same lifestyle after they stop working. Because of inflation and rising medical costs, Hewitt estimates workers will need to replace 126 percent of their salary after retirement to maintain their lifestyle. Both men and women are on track to replace an average of just 67 percent of that amount.

But with a longer retirement stretching before them, women may want to think about closing the savings gap fast.

[morganbarber]

LovesAmerica:
I love your statement, "Kids came along", as if they just showed up in the mail one day. As if you were not involved in the decision making process. Having kids is often an unwise invasion in which there is no exit strategy. By the time the average woman figures out what a mess she created, she starts bellyaching about how somebody else needs to clean it up. Women have a strong natural determination to schitt in their own hat and then whine about how bad it smells.

[ofbyfor1]

Posted by MorganBarber at 02:37 PM : Jul 09, 2008

Bitter much? Most of the women I know rely on themselves for their own support and do not max out credit cards, etc. What a pathetic stereotype you portray (I think that says a lot about YOU).

As for women not saving enough, well, duh, we still only make about 80% of what men make, so there you go.

[nskduke2]

Women who needs them, lol. Women are keeping this economy going because they are spending money.

[lovesamerica]

OK guys, I Read few mean comments about women. Lets see, I was married for 20yrs. A steady job that I went to every day,save money? no, since my husband was a construction worker,seasonal,and didn''t work more than he had to. Kids came along, I worked the overtime,did my best with the house,save money? no because He had to buy the best of everything. 20yrs goes by and he leaves for an old rich broad. I pay for divorce,he works me into letting him borrow money,not pay all child support.save money? no. Now My 2 kids are in college..mom helps,dad doesn''t,I pay their medical and glasses, I ahve been doing this on my own without anybodies help for 10yrs.Save money HaHa.I now work 5jobs,buy my clothes at goodwill,eatout rarely and drive a beater car. He on the other hand has a new wife,girlfriend and vacations in the Bahamas... Me save money? ain''t happening except through my main jobs 401k which is down 10% so far this year.

[morganbarber]

mcv57:
I take it YOU have a vault full of gold bullion, rather than a 401K.

[morganbarber]

I dated a divorced woman for a few months. She had been married for 20 years. Didn''t work during that time. Had a ball riding a fabulous gravy train. But the husband decided to trade her in on newer model. He had been a generous finanical provider, and they enjoyed a very comfortable lifestyle. But they never saved any money. Never was sure if that was his fault or her fault. But when he left, he took his income with him. They legally split the assets, which only amounted to equity in their house. She immediately used all of that money to buy herself a new car. She felt it was an outrage that she had to go get a job and support herself. She told me she planned to retire in 12 years. I said, "Well, you better get busy saving."

[morganbarber]

WarDogLRS:
I strongly support independent single women. It frees up men to enjoy their lives without having to work a second job to to pay off a woman''s excesses. Male celibacy is not fun, but its not fatal either. After 40, a man''s boom boom isn''t important enough to endure all the headaches that go along with it.

[wardoglrs]

Women are far more independent than ever. They no doubt have learned long ago that most men are just control freak''s and predators for *** and lust and abuse. The men of today are losers for the most part they have no morals or values just a lust for flesh and show off''s of tall tales they tell there bud''s. Women can take a man and stump him into the ground and really do dammage to there ego''s so a mans defense is control and abuse. Kutos to the women who knows herself and is ever watch full for these types of loser''s. It''s no wonder the same *** marriage is at an all time high on both side''s

[mcv57]

Posted by clevercandi

When Wall crashes, and the Banks close (for good), you will have nothing. I would not be laughing.

[clevercandi]

I take exception to this article.

I put away 10% of my pay. My employer puts away another 10% of my pay.

Of course, I work two jobs and have no children/pets or husband!! LOL

[morganbarber]

What this article doesn''t state is that most women rely on having a man to take care of them. Saving money for anything is not part of the standard female lexicon. Women are all about SPENDING money. Particularly money that SOMEONE ELSE has earned. I find it quite entertaining to observe a single woman in her late 40''s or so catch on to the fact that a Finacial Genie may not show up to rescue her. And of course before they can start saving for retirement, such women need to pay off all the department store credit cards that have been maxed out for years. Women in their 20''s thinks its cute being a sponge. I think its cute to watch women in their 40''s, who don''t have a gravy train, learn how to swim.

[Syndicate]

Does anybody save enough? What about Married Women? Were these women single? This study would seem to lend credibility to the men being better at math. It must be flawed.

[mcv57]

Why does CBS lag behind the actual DJIA results?

[anecdote1]

Whoops, thought the artical said:
study: women not shaving enough.
Sorry.

[whitemale08]

LMAO! You can thank the FEDERAL RESERVE SYSTEM

[nssherlock1]

Women??? Save??? lmao!