And Now For The Gender Gap
Aon Hewitt’s recent research reports gender parity in 401(k) plan participation, but not in retirement readiness.
They report that 83% of American women aren’t saving enough to meet their retirement needs – compared to 74% of men. Further, they project that women will need 11.5 times their final pay to meet their retirement needs versus 10.6 times pay for men. The study indicated there is a gap of 3.3 times pay between what women need and what they’re on track to have saved in order to retire at age 65; for men, this difference is just 2.0 times pay.
Salary disparities and slightly lower contribution rates (7.5% for women vs. 8.7% for men) combine to create lower plan balances even though men and women are participating in employer plans at the same rate of 79%.
The end result Aon Hewitt found was that the average plan balance for women in 2015 was $71,060, while for men it was $119,150.
Long story short, on the average, women will have to work until age 69 to meet 100% of their retirement needs, a year more than men.
Should you have any questions, please feel free to contact your QBI representative.