Addressing The Gender Savings Gap: A new study from Bank of America/Merrill Lynch finds that the gender savings gap persists, despite recent gains.
The study, which was released in July 2023, found that the average 401(k) balance for women is $59,000, compared to $89,000 for men. This represents a gender savings gap of 30%.
The study found that the gender savings gap is due to a number of factors, including:
Income disparity: Women earn less than men on average.
Caregiving responsibilities: Women are more likely to take on caregiving responsibilities for children and elders, which can limit their ability to save for retirement.
Lack of financial knowledge: Women are less likely than men to have financial knowledge, making it harder for them to make sound financial decisions.
The study’s findings are concerning, as women are more likely than men to live longer in retirement. This means that women will need to save more for retirement in order to have a comfortable lifestyle. The study’s authors called on employers, financial institutions, and policymakers to take steps to close the gender savings gap. These steps could include:
Providing financial education and counseling to women could help them understand their financial options and make sound financial decisions.
Encouraging employers to offer paid family leave and flexible work arrangements could help women balance their work and caregiving responsibilities.
Changing the retirement savings landscape could include making it easier for women to contribute to retirement savings plans and increasing the amount of retirement savings that women can deduct from their taxes.
The study’s authors concluded that closing the gender savings gap is essential to ensuring that all Americans have a secure retirement.