Not a Woman’s Prerogative: Professional women are less prepared to retire
than men and need to save about 2 percent more of their pay a year, factored
over 30 years, to enjoy the same standard of living, according to a
comprehensive study by Hewitt Associates. The Lincolnshire, Illinois-based HR
consulting firm examined projected retirement levels of nearly 2 million
employees at 72 large U.S. companies. It found that both women and men are “on
track to replace 85 percent of pay at retirement,” based on assumed average life
expectancy.
“However, women, on average, need to replace nearly 130 percent of their
final pay at retirement—7 percentage points more than men. When factoring in
differences in longevity, that disparity jumps to 10 percentage points,” thus
resulting in the need for women to save 2 percent more of their annual pay than
men.
Hewitt notes several factors working against women, including living about
three years longer than men, but earning substantially smaller salaries. Women
also in general are less assertive investors and have spottier saving habits,
Hewitt says.
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