Equal Pay Day: Millennial Women Face Bigger Retirement Troubles Than Men
Women earn less money than men for the same job. Over the course of a 40-year career, this wage gap costs women over $400,000 versus their male counterparts, according to a new study by the National Women’s Law Center.
And this lack of equal pay continues to affect women well into their retirement. Happy Equal Pay day.
“There still remains a gender wage gap in this country. The cumulative effect over a career is that you end up with less money,” for retirement, says Lori Trawinski, Director of Banking and Finance at AARP’s Public Policy Institute.
For women over 65, Social Security plays a “key role” in keeping many women out of poverty, as they are less likely to have retirement income from savings or pensions, and on average, are lower earners than men over their lifetime.
“Run the numbers and go in with your eyes wide open,” said Angie O’Leary, Senior Vice President at U.S. Bank Wealth Management.
While some millennial women are asking for higher compensation than men, other factors like work sabbaticals for caregiving and a longer life expectancy mean that millennial women need to think about retirement…now.
With a five-year longer life expectancy than men, “women need their money to last longer,” says O’Leary.
Women are also more likely than men to take time off work for family care, whether for elderly parents, a spouse or children. According to AARP, women are nine times more likely than men to take caregiver positions over their lifetimes.
“It is important that women think through their retirement assets before taking time off to raise kids,” says O’Leary.
She advises for women to “keep a toe in the water” and consider consulting or working part-time rather than totally leaving the workforce. Not only could this help with the transition back into the workforce, but it provides some financial autonomy.
“The important thing is to always contribute to a retirement account even if you are working part-time,” says Trawinski. ” Retirement planning should happen at the family level and individual level. “
Alexandra Talty is a columnist and writer, with a tendency for nomadism. The founding Editor-in-Chief of StepFeed in the Middle East, she is also on Twitter.