When people think about retirement in general terms, an idyllic picture of laid-back golf games and winter hibernations in Florida can come to mind. But when you think about your retirement specifically, does that stereotype still ring true? We’d all like to imagine a fairy tale ending to our working years, but it’s often difficult to achieve — even in our daydreams.
In fact, plenty of people have realistic concerns about the state of their future retirement — even young workers who are just beginning their careers. However, the worries for men and women tend to split along gender lines.
According to a recent survey for Schwab Retirement Plan Services, millennials ages 25 to 34 do spend some time thinking about retirement — and they’re not all comfortable with how their planning is going so far. But what they’re worried about changes depending on whether they’re male or female.
According to the survey, men are split fairly evenly about whether they’re more concerned about being healthy enough to enjoy retirement, or if they’re going to have enough funds to enjoy their golden years. About 54% of millennial men said health is their No. 1 concern, while 46% said they’re more concerned about having enough money. For women, the divide is much more clear. Just 30% of millennial women said they’re concerned about their future health in retirement, while an overwhelming 70% of women said their main concern was having enough money.
Women and retirement: Less confident and working longer
According to Schwab’s findings, women’s concerns about funding their retirements stem from a number of factors. Chief among them is their current income, and what they perceive it will be by the time they retire. Though 79% of women told Schwab they were in good financial health now, 31% of female respondents said they thought they would be working until at least 70 years old. (Only 22% of men thought the same thing.) According to Schwab, that’s an indicator that women believe they’re going to need a few extra years of income to afford a comfortable retirement.
A recent Wells Fargo study explains part of the reason why. In that survey, millennial women reported their average income to be $28,800, compared to an average of $39,100 for men. With that gap, it’s not surprising that 61% of women said they didn’t make enough to save for retirement, compared to 50% of men who said they were in a similar position.
Naturally, that leads to varied levels of savings confidence. Roughly 55% of men in the Schwab survey said they were saving enough for a comfortable retirement, while just 42% of women said they were on track to retire when they want to. And even when women do have money to put aside, they’re not confident about their savings strategies. A total 75% of women said they wished there was an easier way to choose the investments for their 401(k) — not a shock when you consider that only 36% of women feel totally on top of their investments in the first place.
“A variety of social and economic factors impact the way men and women view money, and our survey showed that this is already affecting the youngest generation of workers,” said Catherine Golladay, senior vice president of participant services and administration at Schwab Retirement Plan Services.
The wage gap bites again
Though not every financial insecurity traces its roots back to income, many of them do. When it comes to women and their finances, many of the financial worries can often be explained — at least in part — by the persistent wage gap in many industries.
The wage gap is clearly illustrated by the Wells Fargo findings, and pops up in most gender comparisons of income. It explains why women are consistently shown to be behind in their retirement savings, even if they’d like to be meeting their savings goals.
The wage gap is more nuanced than simple gender discrimination, but income can be affected by the career field you pursue, the job environment you choose, and the sacrifices you make for the sake of loved ones. A recent Wall Street Journal article, for example, reports that women can lose up to $1.3 million in retirement savings when they take 10 years off of work for caregiving responsibilities — whether that’s for children or other family members. Considering that $1 million is often the golden number for retirement savings, it’s not surprising that losing that chunk of savings is a blow to the confidence level.
Retirement and health: Saving the worry for another decade
Though women have more than their share of retirement worries, they don’t shoulder all of it. About 89% of both men and women told Schwab they plan to rely on themselves for their retirement funding. Almost 75% of both genders said a majority of those savings would come from their 401(k) accounts, so it makes sense that the largest areas of savings worry is centered around that strategy.
While more men were worried about their health in retirement, it’s pretty easy to see why neither gender of millennials were all that worried about having the stamina to enjoy their sunset years. A full 86% of men and 84% of women said they were in good physical health, which puts off the worry about their well-being for another time.
When money is the concern, many millennials expressed an interest in employer-provided education, tools, and resources to help them make thoughtful choices about their retirement savings. More than 85% of men and women said they would welcome a financial wellness program in their workplace — perhaps another benefit companies could consider adding.