50% of women say they are behind on their retirement savings. Here’s why they face challenges

Finding enough money for retirement is a challenge for all workers.

Women are 50% more likely to say they are late, compared to 35% of men, according to a new report from Goldman Sachs.

In addition, 24% said they were “very late”, compared to 14% of men.

Almost half of women – 47% – said they are on track or ahead of schedule with their retirement savings. They were still below a majority of men – 64% – who said the same.

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The findings of the Goldman Sachs report come as women face greater barriers to how much they will need to save for retirement. On average, American women live three years longer than men, according to research.

Women are also 61% more likely than men, 50%, to retire earlier than expected, according to the report. The main reasons why women retired earlier were health, family care needs or job loss.

For those who are retired, more than half of women — 58% — receive half or less than half of their pre-retirement income, compared to 44% of men.

Meanwhile, only 20% of women receive 70% of their pre-retirement income, the amount some experts say retirees need to maintain their standard of living. In comparison, 30% of retired men have incomes that reach this level.

“Women lag further behind men when it comes to preparing for retirement,” said Michael Moran, senior pensions strategist at Goldman Sachs Asset Management.

“There are a number of competing financial priorities that all individuals have to deal with, but women in particular have to deal with,” he said.

One of the main reasons why women’s retirement savings are insufficient is that they are more likely to take time off work to care for children or aging parents.

Women tend to work nine years less than men, which can reduce their retirement savings by 35%, according to Moran. It can also have a negative effect on the amount of social security benefits they receive.

Women also face a persistent pay gap. They earned just 82 cents for every dollar earned by men in 2020, according to the US Census Bureau.

Men may also earn more on investments in their retirement accounts because they carry higher wages. That’s even though women tend to have better savings habits, including greater participation in voluntary 401(k) plans, according to a recent Vanguard report.

More immediate financial worries can also get in the way. Amid high inflation this year, 45% of women cut overall spending, compared to 37% of men, Goldman Sachs found. Women were also more likely to withdraw from their emergency savings, with 24% doing so, compared to 17% of men.

Another factor that may affect women’s preparedness for retirement, according to other research, is their choice to marry.

Recent research from Boston College’s Center for Retirement Research found that women who have spent most of their lives married tend to fare worse than never-married women. The reason is largely due to the declining wealth of their spouses. Because the wealth of never-married women for the most part has remained stable, their wealth has increased relative to their mostly married counterparts, according to the report.

An unexpected divorce or the death of a spouse can also upset their financial plans in retirement.

According to Candice Tse, global head of strategic advisory solutions at Goldman Sachs Asset Management, all women can improve their retirement income by seeking professional advice, which can be tailored to their circumstances. It can also help ease their fears, she said.

“A lot of women worry about having so much weight on their shoulders,” Tse said. “They are afraid of making a mistake. They are worried about their finances and they are less confident.”