Why there is a gender gap in retirement savings

By Brian O'Connell/MainStreet.com

There are plenty of examples of the struggle women have saving for retirement.

For example, this study from BlackRock shows that men emphasize long-term savings more than women, and more have started saving and have a good plan in place than women saving for their post-career years.

Women in the study are more likely than men to choose "negative terms" to describe their finances, with terms such as "nervous," "sober," "pessimistic" and "frustrated" appearing frequently.

So is it any wonder women are frustrated about their retirement savings, especially when they seem to be saving at a greater rate but somehow have less to show for it?

A study from Vanguard that tracked 3 million retirement savers says women may have more problems than they realize in closing the retirement gap.

The report claims women are 10 percent more likely to enroll in a company-sponsored retirement plan such as a 401(k) and more likely to reroute their income into a company savings plans.

Despite pacing ahead of men in those two key areas, though, women have only an average $78,000 in company retirement accounts versus $121,000 for men.

That significant gap can be explained by the wage advantage men enjoy against women, one expert says.

"Put simply, wages help determine how much people save," says Jean Young, a senior research analyst with the Vanguard Center for Retirement Research. "The average wage for our male participants runs about 40 percent higher than women's, with men's wages averaging $107,000, while the average wage for our female participants is $77,000."

Another problem is that women tend to borrow from their company retirement plans at a higher rate than men.

TIAA-CREF reports 29 percent of Americans have taken out a loan from their retirement plans, with 44 percent of those saying they regret it. Women are more likely than men to take from their retirement savings - 52 percent to 41 percent.

The long-term outlook isn't any more positive, as Vanguard notes that men work longer than women and thus have more time to build retirement assets.

Along with the working years issue, it's the wage gap that stands as the chief culprit for the retirement savings gap.

"Women still earn less than 80 cents to every dollar a man earns," says Nicole Mayer, financial advisor at RPG-Life Transition Specialists, an investment management firm. "But they also tend to take more time off work to raise their children and care for elderly parents."

How can women catch up? Mayer advises taking a page out of the men's salary demand playbook.

"Men tend to be more ruthless negotiators when it comes to salary," she says. "I advise women to reflect on whether their current salary is in line with their contributions and, if need be, have that tough conversation with their supervisors. If you make more, you can save more. Period."