Gender wealth gap: Women save just 75% of what men do for retirement

Much is said about the wage gap between women and men in the United States, with the American Community Survey’s latest data showing that as of 2020, women earn only 82 cents to a man’s dollar, a figure that has only marginally increased over the last decade.

But a new study from insurance advisor Willis Towers Watson suggests that more attention should be paid to the wealth gap — specifically, the wealth gap at retirement. According to their Global Gender Wealth Equity Report, American women had, on average, only 75% of the wealth at retirement as their male counterparts did. The wealth gap was even larger amongst more senior workers, as in leadership and executive positions, women had only about 62% of the wealth of male retirees. On the other hand, in frontline operational roles, women stored about 89% as much in retirement savings as men.

Some of the main reasons the researchers noted for the difference included wage inequality and disparities in career advancement opportunities. In the case of more senior workers, the wage gap was a particularly important factor driving wealth inequity, experts noted.

Outside the workplace, childcare duties also contributed to the gap by preventing women from obtaining paid employment and accruing wealth.

Related: Women have less influence over investing decisions than men: Study

Manjit Basi, the senior director of Integrated & Global Solutions at WTW, commented on the findings in a press release, saying, “It’s imperative that activities around gender diversity, equity and inclusion broaden to look at economic wealth at the end of women’s working careers. Pay is a fundamental factor that underlies the gender wealth gap, and while addressing the gender pay gap will partially close the wealth gap, it won’t eliminate it entirely.”

How employers can help close the gap

In regards to how employers can help close the gender equity gap, Basi said, “Employers who provide contributions to employees’ savings which are not conditioned on employee contributions can help women build wealth regardless of their capacity to save today.” Basi added that providing access to independent financial counselors, decision support tools, and debt management services can also help.

“To figure out what programs would have the largest impact, and how best to engage women to participate, employers can provide targeted communications and also rely on data analytics and employee listening to better understand how to meet the financial and wealth-building needs of the women in their organizations,” Basi said.