Women face a retirement gap

There's fairly consistent data in academia and on Wall Street that, for whatever reasons, women just aren't saving enough for retirement – especially compared to men.

Take a June 2016 study by Aon Hewitt, a Lincolnshire, Illinois-based global human resources company. Researchers show 83 percent of U.S. women aren't saving enough for retirement, compared to 74 percent of men.

Granted, that's not a huge gap, but it's enough to feed the continuing business media narrative that the women don't take retirement needs seriously enough, and need to shift their investment accounts into higher gear.

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According to Aon Hewitt, "women will need 11.5 times their final pay to meet their needs in retirement, compared to just 10.6 times pay for men."

Digging further, the study also shows a gap of 3.3 times pay between what women need and what they're actually on track to have saved in order to retire at 65.

"For men, the difference between needs and resources is just 2 times pay," Aon reports. "This shortfall means women, on average, will need to work until age 69 – one year longer than men – in order to meet 100 percent of their needs in retirement."

What's to explain the narrative that women are lagging behind on retirement savings? Some conventional reasons appear obvious.

"Women face significant stumbling blocks when it comes to saving enough for retirement, including longer lifespans, lower salaries and a greater likelihood of taking hardship withdrawals from their 401(k)s," says Virginia Maguire, director of retirement products and solutions at Aon Hewitt. "Making retirement and financial well-being a priority is paramount for overcoming those challenges."

But talk to women who both save for retirement, or who work as financial advisors, brokers, and tax advisors who counsel long-term savers, and the reasons for that retirement gap go deeper than just longer lifespans.

U.S. News & World Report reached out to professional working women for their view:

Marie Thomasson, an investment consultant with Modern Assets in Los Angeles. "I could write an entire essay about this subject. Saving for retirement doesn't happen in a silo. Like most money issues, it's necessary to look at the underlying emotions surrounding money. While the majority of women claim that they are independent, 'The Feminine Mistake: Are We Giving Up Too Much?' by Leslie Bennett suggests otherwise. Women's career choices, including lower paying and lower status, indicate a subconscious bias toward these careers not because we don't mind making less money, but often that we assume a man will come along and take care of the major financial responsibilities. In the same vein, women defer saving for retirement because the jobs we take often cover living costs and nothing more. And yet, even successful women still fall prey to the White Knight Syndrome, spending today in the blind hope that someone will come along and take care of us."

[See: 11 Great Investing Tips for Women.]

Chantay Bridges, coach, real estate agent, speaker and writer in Beverly Hills, California. "A woman's priorities are different from men. A woman will consider her child's education and husband's vocational goals ahead of her own. If she has to choose, retirement for herself will be on the list but not at the top. Women also tend to put their children, spouses and others ahead of themselves. Many times, you hear women place their dreams and desires on the back burner until the children are out of the nest or their home scenario changes. Being this is the case, retirement is one of those things they tend to be lax about. Additionally, some women don't handle the bills or financial matters in their home, and their spouse deals with those matters. Consequently, they don't place a lot of thought in making sure they are well prepared for retirement. They trust that whatever choices their husband is making is for the best."

Abby Eisenkraft, chief executive officer at Choice Tax Solutions in New York. "It's a combination of many issues that result in lower retirement balances for women. Firstly, as many strides as women have made in the last few decades, many men are still paid more for the same job that a woman may hold. Lower income results in lower retirement savings. Secondly, many women come out of the workforce to raise children, so they don't have the ability to continuously sock away money year after year. And when one re-enters the workforce, some companies do not allow participation until the employee is there for a certain amount of time. All of this lost time results in lower dollars saved. Thirdly, in cases of divorce, many women have more financial obligations. Even if the spouse provides some support, it is generally up to the woman to fund a great deal of expenses for the children. In my practice, I see many women who emptied their 401(k) accounts to send their children to college. They would rather starve later in life than not take care of their children."

Lyn Alden, founder of Lyn Alden Investment Strategy. "A significant reason that women lag behind men in saving for retirement is simply that women make less money than men on average, for a variety of reasons. For instance, women enter high-paying technical fields at a lower rate compared to men, are more likely to take a break from work to have children, and are less likely to negotiate for higher salaries. As a result, women are not as well-positioned to save as much as men each year, and the gap widens between the genders as they age. Studies also show that gender bias still exists. For example, studies show that women are more likely to be viewed negatively when negotiating for a higher salary compared to men. In addition, a study found that MBA students are willing to invest less money in businesses that are led by women, even when the experiment is controlled so that the male-led and female-led businesses are identical. All of these forces provide headwinds against women earning equal pay, even when they pursue the same jobs as men."

Clearly, professional women have strong opinions on retirement savings, or lack thereof. Most investment professionals would generally agree women have more of an uphill climb to a comfortable retirement.

[See: 12 Steps Toward a Strong 401(k).]

It should be a call to arms to save more. Considering the high stakes on the table, that's the attitude any retirement saver should take.

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