Another flawed survey

When it comes to retirement, women save less than men and are more likely to default on loans taken out of their retirement savings. So says a recent study undertaken by Aon Hewitt, which concluded that these savings and investing habits, paired with longer life expectancies, play a critical role in why women are less likely than men to be able to meet their financial needs in retirement.

Women save 6.9% of their pay versus 7.6% for men.

For the study, Aon Hewitt analyzed more than 140 defined contribution plans representing 3.5 million eligible employees. It showed that while women participate in their employers’ defined contribution plans at the same rates as men, they save less. On average they save 6.9% of their pay versus 7.6% for men. A third of women also contribute below the company-match threshold, compared to just a quarter of men.

Aon Hewitt calculates that full-career contributing women should have 11.2 times their final pay to meet their retirement needs, but they are actually on track to amass only 8.6 times final pay, leaving a shortfall of 2.6 times pay. Meanwhile, males have a projected shortfall of only 1.9 times pay.

Additionally, 71% of women who terminated employment with an outstanding loan defaulted on the loan, compared to 64% of men.

“There are factors that women can control to boost their retirement savings, such as how much they contribute, how they invest over time and whether they keep assets within the retirement system,” said Patti Balthazor Björk, director of retirement research at Aon Hewitt.

 The average woman has to work an extra 64 days a year to earn what the average man took home the previous financial year. The Equal Pay Day calculation is based on the current national gender pay gap - 17.5% - a figure which has rarely changed in the past 20 years. The fact is that in 2013, the average full-time woman earns $266.20 less each week than the average full-time working man. 

That means women working full-time jobs - on average - get $13,842 less per year for doing the same work. If you earn less you save less, to me that is common sense, but this one factor is not considered in the above information. 

This means that the  more of the total amount of income coming into their home must be spent on everyday expenses, which leave less for savings of any type. Increase income, and you increase the amount you can save.  Pay equal rates to men and women and the problem will be solved. Women earn less and therefore save less then men, fix the inequality of wages to fix the issue.