On the hunt for a Mother’s Day gift this weekend? Here’s one that won’t cost a dime but could provide a big boost to Mom’s pocketbook down the road: Sit down and have a talk about retirement planning.
Women who aren’t mothers need to have the talk, too. That’s because women face a much tougher retirement outlook than men, and the reasons are clear.
“Women have lower lifetime income based on less time in workforce,” says David Littell, who directs a program focused on retirement income at the American College in Bryn Mawr, Pennsylvania. “As a result, they have less in savings, lower Social Security benefits – and they live longer than men. Those things don’t go well together.”
Many women still earn lower wages than men: On average, women made about 81 percent of the median earnings of men in 2012, according to the U.S. Bureau of Labor Statistics.
They’re also more likely than men to work part-time, often because of caregiving responsibilities for aging parents or children. That cuts into earnings, but it also means they are less likely to have access to workplace retirement plans.
The 2014 Transamerica Retirement Survey found that 66 percent of women have access to a workplace retirement plan, compared with 71 percent of men. Women who do have access to a plan participate at nearly the same rates as men, but their contribution levels are lower – 7 percent of salary, compared with 10 percent for men.
Experts point to several valuable steps that women – moms or not – can take to boost their retirement security. Learn more at Reuters Money.