Women behind schedule when it comes to retirement savings, study shows

Women are more likely to trail men when it comes to retirement savings. Furthermore, they are far less confident they will meet their retirement goals, according to a survey released this week.

The Goldman Sachs Retirement Survey & Insights Report 2022, Navigating the Financial Vortex: Women & Retirement Security, shows that more women (50%) than men (35%) said their retirement savings are behind schedule. The study revealed that 24% of women said they were “very behind schedule,” compared to 14% of men. Nearly half of women (47%) said they felt on track or ahead of schedule, while substantially more men (64%) responded similarly, the study showed.

All that said, the report revealed that 61% of women respondents reported retiring earlier than planned compared with 50% for men. To be sure, however, only 15% of women said they retired because their “savings were sufficient to fund my retirement,” versus 25% of men. The survey also showed that 66% of women who retired for reasons outside their control most often cited health reasons (29%), taking care of family (16%), or that their job was no longer available (15%).

“Women more often than men are forced to work part-time, spend time out of the workforce to care for young children and elderly family members, and juggle other financial priorities during their careers,” Candice Tse, global head of strategic advisory solutions at Goldman Sachs Asset Management, said in a statement. “This can make their journey to retirement more difficult and incredibly personal.”

“Women commonly report that they feel behind in accumulating assets to be able to live the lives they want in retirement. Part of that is that women make less money than men on average. Even for women with high incomes, many feel insecure about their money decisions," said Debra Brennan Tagg, president of BFS Advisory Group. a member of FSC Securities, part of the Advisor Group network of firms. "Also, many women have made intelligent, well-informed decisions to take time off from making money to support their family or their own personal needs.”

Tagg added that the wealth management industry “doesn’t yet have metrics to measure these choices that women make so they feel confident that they are on the right path to enjoy retirement,” which is one of the reasons that financial planning is "so crucial for women."

Elsewhere in the survey, the results showed that 58% of retired women reported that they receive 50% or less of their pre-retirement income, including Social Security, relative to 44% of men. Notably, only 20% of women reached 70% of their pre-retirement income, relative to 30% of men who reached this amount, according to the survey.

The authors of the report point out that American women live three years longer on average than men and thus can be expected to require more savings for a comfortable retirement.

Finally, on the topic of managing their own retirement savings, the survey showed 69% of retired women reported doing so, compared with 63% for men. Even so, the women respondents expressed quite a bit more discomfort about doing so: 63% reported stress or anxiety, compared to 52% of men, and 31% called it “very stressful,” versus 20% of men.

“Women tend to be primary caregivers, both of children and parents, which means they are more likely to drop out of the workforce, hence, the earlier 'retirement.' They also tend to take less risk in investing so their portfolio performance can lag, especially in up markets," said Leslie Beck, owner and principal of Compass Wealth Management. "Finally, women are more willing to put aside their own savings in order to spend more on their children, whether it be for school activities, or paying for education. Taken together, it's no surprise that women feel they are 'behind' as far as their retirement goals are concerned."