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Why Are Women Saving Less Than Men?
Old 02-12-2011, 10:34 AM   #1
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Why Are Women Saving Less Than Men?

Article talks about women in their 50s lagging behind men and how younger women are faring better. I had always thought that women were considered better long term savers then men due to their longer life expectancy and (often) shorter work history. Guess I was wrong.

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The reality is that average DC plan balances of working women 50 years or older lag those of working men of the same age by almost $63,000, due in part to the fact that women defer contributing to retirement plans at a higher rate and earn less than men of the same age. This could be at least partially due to the fact that men are more likely than women to think retirement saving is important.
The good news is that younger women who are married or in civil unions seem to fare better. That is because the gap in their earnings is less significant than their older counterparts, according to the study, which was conducted in July and August of 2010 and surveyed nearly 2,500 employees, who did not work for the federal government or military, were not self-employed, and were eligible to participate in a DC plan.
Retirement Conundrum: Why Are Women Saving Less Than Men? - Financial Planning
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Old 02-12-2011, 11:01 AM   #2
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1. I wonder if this is because women in their 50s were brainwashed for so long (in their youth) to believe the "man" would provide?
2. Also if you make less money then men, a higher % of your income will go to basic expenses before you can save.
3. FInally, I wonder what the impact of the liklihood of being a Single Mother would impact the results. If there is a divorce or unmarried, in a high % of the cases the Mother takes care of the children and most if not all of the expenses relating thereto.

Just some random thoughts on this survey. I am in my late 50s and would say I believe I save as much or more than men, but since I am self employed I would not have been included in the study.
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Old 02-12-2011, 11:11 AM   #3
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Originally Posted by NW Landlady View Post
1. I wonder if this is because women in their 50s were brainwashed for so long (in their youth) to believe the "man" would provide?
2. Also if you make less money then men, a higher % of your income will go to basic expenses before you can save.
3. FInally, I wonder what the impact of the liklihood of being a Single Mother would impact the results. If there is a divorce or unmarried, in a high % of the cases the Mother takes care of the children and most if not all of the expenses relating thereto.
These all sound like reasonable explanations to me.
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Old 02-12-2011, 11:22 AM   #4
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Those women perhaps earned less than men, especially if they took time off from their careers for childcare. Also, women in their 50s were just on the cusp of the so-called women's lib movement, which started in the early 70s--their role models were still the typical "woman's work" back then, including housewife.
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Old 02-12-2011, 11:24 AM   #5
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When I read articles like this, I thank my Mom (in heaven) over and over again for her drilling it into my thick head as a kid mentoring me to study hard, get a good job, and SAVE. I certainly learned from her example. She was "on her own" since age 16 and made her own way financially. Marriage/divorce did not provide a means for her to be provided for on any grand scale. Life happens.
I see women my age (52) and younger just not getting it that they may have to live on their own someday. It is very frustrating to watch unfold.
I try to use my own example to get their attention, but I get glazed over looks.
So I no longer bother...
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Old 02-12-2011, 11:28 AM   #6
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Originally Posted by NW Landlady View Post
1. I wonder if this is because women in their 50s were brainwashed for so long (in their youth) to believe the "man" would provide?
2. Also if you make less money then men, a higher % of your income will go to basic expenses before you can save.
3. FInally, I wonder what the impact of the liklihood of being a Single Mother would impact the results. If there is a divorce or unmarried, in a high % of the cases the Mother takes care of the children and most if not all of the expenses relating thereto.

Just some random thoughts on this survey. I am in my late 50s and would say I believe I save as much or more than men, but since I am self employed I would not have been included in the study.
I think your list is good, too.

What I would like to see are not aggregate figures but those separated out by marital status, number of children, location, and income. For example, do single, childfree women between 25 and 30 save the same percent as single, childfree men between 25 and 30 with the same income in the same region?
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Old 02-12-2011, 11:32 AM   #7
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Old 02-12-2011, 11:33 AM   #8
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When I read articles like this, I thank my Mom (in heaven) over and over again for her drilling it into my thick head as a kid mentoring me to study hard, get a good job, and SAVE. I certainly learned from her example. She was "on her own" since age 16 and made her own way financially. Marriage/divorce did not provide a means for her to be provided for on any grand scale. Life happens.
I see women my age (52) and younger just not getting it that they may have to live on their own someday. It is very frustrating to watch unfold.
I try to use my own example to get their attention, but I get glazed over looks.
So I no longer bother...
Your post reminds me of a book I read a few years ago by Leslie Bennetts. Her book, titled, "The Feminine Mistake," includes stories of many women who relied too much on their primary asset of their husband's earning potential only to see that asset disappear due to death, divorce, or disability, leaving them with an overly difficult task of making ends meet on their own, sometimes having to also support children.
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Old 02-12-2011, 11:43 AM   #9
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Many of the factors I would mention (lower earnings and divorce with children particularly) have already been mentioned.

I also think it can be part of a coordinated financial plan with a spouse. On paper, I saved less in my 401(k) than DH saved in his although my salary was more.

However...there were reasons. In my 401(k) plan I received a contribution from my employer each year regardless of how much (or even if) I contributed. In DH's 401(k) plan, he received a matching contribution from his employer. So, in years where we weren't maxing contributions of both plans (and raising 3 kids we usually didn't), our first priority was to contribute enough in his plan to make sure he received the maximum matching contribution he could get.

Also, there were times when the funds available in his plan were much better, more extensive, lower cost than the funds available in my plan.

The result is that the savings in my plan ended up being less than those in his plan.

I wasn't worried about the possibility we might get a divorce with the savings being in his name because we live in a community property state.
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Old 02-12-2011, 11:45 AM   #10
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Originally Posted by scrabbler1 View Post
I think your list is good, too.

What I would like to see are not aggregate figures but those separated out by marital status, number of children, location, and income. For example, do single, childfree women between 25 and 30 save the same percent as single, childfree men between 25 and 30 with the same income in the same region?
+1--I think these statistics would be quite different (and much more enlightening) than the general "women over 50 have less in savings than men over 50" finding.
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Old 02-12-2011, 11:51 AM   #11
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...asset disappear due to death, divorce, or disability, leaving them with an overly difficult task of making ends meet on their own, sometimes having to also support children.
These Black Cloud [corrected terminology ] events happen to both men and women. Without a lifetime of savings or building a retirement portfolio, the creek awaits and there is no paddle in hand.

In the case of a spouse passing, it is a common misbelief that the life insurance and/or survivor pension & health benefits (if any) and/or SS annuity will be "enough".
I can tell you from my own experience that it is not. It helps, but my own savings during a career in a high paying job was the critical piece that allowed me to FIRE. If I had kids, I would still be w*rking.

Every situation is different...I still live in my house, I had to cut my expenses to FIRE, but I am making it w*rk.
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Old 02-12-2011, 12:11 PM   #12
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These Black Swan events happen to both men and women. Without a lifetime of savings or building a retirement portfolio, the creek awaits and there is no paddle in hand.
A small quibble. Divorce, death and disability are hardly Black Swans. The probability of at least one of these things happening to at least one member of a married couple somehwere along the way is quite high, likely over 50%.

Another thing I would like to say is that if there are assets in a marriage (IOW, if the woman has taken a smart gamble rather than a dumb one) the woman is very likely to walk out after divorce in better financial shape than the man. These stories about poor single mothers don't apply very well to upper middle class women.

Ha
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Old 02-12-2011, 12:30 PM   #13
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Another thing I would like to say is that if there are assets in a marriage (IOW, if the woman has taken a smart gamble rather than a dumb one) the woman is very likely to walk out after divorce in better financial shape than the man.
Ha
In my experience and AFAIK generally the man is worse off immediately after a divorce but recovers about 5 years afterward. True for me, BIL and a lot of folks I know. The mans earning potential is greater and so commonly a better recovery over time.
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Old 02-12-2011, 12:44 PM   #14
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Could well be. Guys just like to complain about being taken to the cleaners, and also we usually do not like to feel guilty.
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Old 02-12-2011, 02:16 PM   #15
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A small quibble. Divorce, death and disability are hardly Black Swans. The probability of at least one of these things happening to at least one member of a married couple somehwere along the way is quite high, likely over 50%.

Another thing I would like to say is that if there are assets in a marriage (IOW, if the woman has taken a smart gamble rather than a dumb one) the woman is very likely to walk out after divorce in better financial shape than the man. These stories about poor single mothers don't apply very well to upper middle class women.

Ha
Good point. My X never saved a cent. Luck ( and the family court system) smiled on her. Gets $250k every year from me. Lives in a $1.5mm debt free house. She gambled on an 18 year old high school senior and it paid off. She is certainly not representative of most women, single or divorced who have to work and save very hard for a decent retirement.
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Old 02-12-2011, 02:20 PM   #16
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In my experience and AFAIK generally the man is worse off immediately after a divorce but recovers about 5 years afterward. True for me, BIL and a lot of folks I know. The mans earning potential is greater and so commonly a better recovery over time.
Agree. I went through 5-7 difficult years after my divorce. She (theX) was totally dependent on me during this period and I was borrowing heavily to keep everybody going. Luckily my career took off and everybody was fine in the end.
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Old 02-12-2011, 02:43 PM   #17
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Hard to generalize individual divorce experiences to broad generalizations. When one spouse holds on to the house, they may have to transfer virtually all retirement accounts to ex. Custodial parent (almost always woman) may do this to be less disruptive for kids. Maybe this is enough of a trend for divorced women in their 50's that it helps explain part of the skew.
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Old 02-12-2011, 07:39 PM   #18
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Old 02-12-2011, 09:12 PM   #19
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Old 02-12-2011, 09:19 PM   #20
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Six minutes! Why did it take so long?

Wouldn't it be something like " Sweetie , Pick me up a pair of those jeans I like at the Gap ".
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