A new report from TIAA, “Income Insights: Gender Retirement Gap,” suggests the barriers women face when it comes to planning for retirement are very significant and very long-lasting.
Diane Garnick, managing director and chief income strategist at TIAA, penned the report.
“We live in an era where gender equality is increasingly becoming the norm, but we also happen to live during a time with ample access to the data and tools necessary to draw more accurate conclusions,” she suggests. “The data enables us to identify the obstacles women face during their savings and retirement phases. The tools enable us to provide the clarity necessary for resolving the problem at hand.”
According to TIAA, the data points speak for themselves: In order for two recent college graduates to have the same amount of money saved for retirement, the average man would need to save 10% of his salary, while the woman would need to save 18%. At the same time, generally speaking, TIAA finds women work for less years and receive fewer salary increases compared with men, among other issues.
“Many retirement strategies assume workers will be in the workforce for 40 years,” the TIAA report says. “The data demonstrates that neither men nor women tend to work that many years. Frequently, women take time off to have children, and then do so again later in life to care for elderly parents. These career breaks add up, resulting in women spending significantly fewer years in the workforce.”
In terms of the real data, men work an average of 38 years, while women average 29 years.
“This nine-year shortfall means that women work 75% of the years that men work,” TIAA observes. “This fact alone makes it immediately obvious that women need to save a higher percentage of their salary while they are working.”
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