One result of the gap between men’s and women’s earnings is lower overall retirement preparedness for women, says a new report that meanwhile says there has been some improvement since a similar study five years ago.
One factor relating to overall pay differences, educational levels, “is almost closed” although it “has not yet translated to gender equality in employment, earning power, and retirement income later in life,” said the report by the TransAmerica Center for Retirement Studies.
“Women are faced with a number of significant challenges. It is the norm for many women to take the primary role in caregiving responsibilities for children, which often results in more career breaks and increased likelihood to work part-time over an extended period. Such realities make it extremely difficult for women to accumulate sufficient savings during their career to achieve a financially secure retirement,” it said.
One way that effect is seen, it said, is that while the income gap between women and men is “comparatively slight” up until about age 30, it then widens “as women become more likely to find themselves in either less senior roles or in part-time roles. By comparison, the trend among men is for continued income growth until their mid-fifties.”
“Ultimately, the research findings make clear there is still significant work to be done in improving the retirement readiness for all workers and closing the gap between women and men. Societally, our work is far from done, and this message needs to be far more widely felt, acknowledged and, most importantly, acted upon,” it said.
The report stressed the importance of retirement savings for women including developing and following a written strategy, creating a backup plan for unforeseen events such as family caretaking needs, and embracing life-long learning to keep job skills up to date.