50% of women say they are behind in their retirement savings. These are the reasons

Lorie Konish -

Raising enough money for retirement is a challenge for all workers.

According to a new report from Goldman Sachs, women are more likely, with 50%, to say they are behind, compared to 35% of men.

Moreover, 24% say they are "very late", compared to 14% of men.

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Nearly half of women, 47%, say they are on track or ahead of schedule when it comes to their retirement savings.

However, they do not reach the majority of men (64%), who say the same thing.

The findings of the Goldman Sachs report come at a time when women face greater obstacles in terms of how much they will need to save for retirement.

On average, American women live three years longer than men, according to the research.

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Women are also more likely, at 61%, than men, at 50%, to retire early, according to the report.

The main reasons why women retired early were health, family needs or job loss.

Among retirees, more than half of women (58%) earn half or less than half of their pre-retirement income, compared to 44% of men.

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Meanwhile, just 20% of women receive 70% of their pre-retirement income, the amount some experts say retirees need to maintain their standard of living.

By comparison, 30% of retired men have incomes that reach that level.

“Women lag behind men in preparing for retirement,” said Michael Moran, chief pension strategist at Goldman Sachs Asset Management.

"Everyone has to deal with a series of competing financial priorities, but especially women," she said.

Why women face unique challenges

One of the main reasons women do not save enough for retirement is that they are more likely to stop working to care for children or elderly relatives.

Women typically work nine years less than men, which can reduce their retirement savings by 35%, according to Moran.

This can also have an adverse effect on the amount of Social Security benefits they receive.

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Women also face a persistent pay gap.

They earned just 82 cents for every dollar men earned in 2020, according to the US Census Bureau.

Men may also earn more on their retirement account investments because they are deferring larger salaries.

And this despite the fact that women tend to have better savings habits, including greater participation in voluntary 401(k) plans, according to a recent Vanguard report.

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More immediate financial concerns can also get in the way.

According to Goldman Sachs, amid high inflation this year, 45% of women reduced their total spending, compared to 37% of men.

Women are also more likely to withdraw money from their emergency savings: 24% do so, compared to 17% of men.

According to other studies, another factor that can affect the preparation of women for retirement is whether or not they decide to get married.

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A recent study from Boston College's Center for Retirement Research reveals that women who have spent most of their lives married tend to have worse outcomes than those who have never married.

The reason is largely due to the declining wealth of their spouses.

According to the report, since the net worth of women who have never been married has remained stable for the most part, their net worth has increased compared to that of women who have been married.

An unexpected divorce or the death of a spouse can also derail your financial plans for retirement.

According to Candice Tse, global head of strategic advisory solutions at Goldman Sachs Asset Management, one way for all women to improve their retirement income is to seek professional advice, which can be tailored to your situation.

It can also help ease your fears.

“Many women fear having a lot on their shoulders.

They are afraid of making a mistake.

They are worried about their finances and have less confidence,” Tse said.