Here in America, we are facing a rather serious epidemic. No, I’m not talking about the fact that crazy hooligans are running for president. Nor am I referring to the fact that 9 out of 10 teenagers do not know the difference between “your” and “you’re” when used in a sentence (I made that statistic up, but it feels pretty accurate based on my experience). We are facing a retirement epidemic and the individuals getting the shortest end of the stick are women.
Earlier this year the Consumer Federation of America released their ninth annual America Saves Week survey in which they polled roughly 1,000 non-retired Americans regarding their preparedness to retire. The survey found that overall, the majority of Americans find themselves insufficiently prepared for retirement, noting that only 40% of respondents felt they were making “good or excellent progress in ‘meeting their savings needs’.” Additionally, roughly half of participants responded that they were saving at least 5% of their income, while only 43% were saving outside of work and only 38% could claim to have no consumer debt. While these statistics are sobering enough on their own, what’s even more concerning is the gender gap the survey revealed. While 74% of men reported making progress with their savings, only 67% of women could say the same and while 72% of men reported spending less than they received in income and saving the difference, only 60% of women were in the same boat. That means that 40% of women are digging themselves into a black hole of debt compared to only 28% of men!
It’s easy to look at these statistics and point to income inequality as the culprit or simply blame the lack of feminists out there but in truth, like most complex economic issues, there are many variables that play into these numbers and they’re not all bad. For starters, women have long fulfilled the role of caregivers, which has historically meant stepping back from the workforce either to care for small children or ailing parents and grandparents. My mother has been both a stay-at-home mom and a caregiver for my late grandmother and she did an excellent job at both. I have personally chosen to pursue a working-girl lifestyle, but that doesn’t make me any less thankful that she made the decisions that she did. We all have our own preferences and that’s a good thing. An unfortunate side-effect of her decision, however, is that the bulk of my parent’s retirement savings is under my dad’s name. While they have a strong marriage and have built a financial future together, this is not always the case with couples. There are instances when a marriage ends, leaving one or both parties significantly under-prepared for retirement. Additionally, for those that do find themselves on their own financially, the majority of financial wisdom is written by and for men. One of my favorite financial blogs has the word "mustache" in the title, and try as I might, I will never be able to identify with having a "money mustache." Women make up roughly 50% of our workforce – whether they are working in an office or working in the home – and I think they deserve to be valued a little better by the financial sector.
In response to this unfortunate lack of non-mustached advice, we are excited to launch our financially female-friendly website, The Cupcake Club, under the Cedarstone Advisor umbrella. Our goal is simple: to empower women to make confident, informed financial decisions based on material that’s helpful and easy to understand, thereby allowing them to prosper. To keep things fun and engaging, we’ve sprinkled our site with delicious cupcake recipes because it is my personal opinion that cupcakes make everything better - including finance. Last, but not least, we are also launching a monthly Cupcake Club newsletter that will go out the third Thursday of every month filled with articles for women of all ages as well as a cupcake of the month recipe (you can sign up for that newsletter here).
If you’d like to learn more about how you can prepare for retirement, please give us a call or shoot us an email. We’d be happy to grab some coffee and talk through your different options with you. If you’d like to learn more about the gender gap when it comes to retirement, check out this short video from Bloomberg Business:
“Less Than Half of U.S. Households Report Good Savings Progress, According to 2016 America Saves Week Survey.” Consumer Federation of America. February 22, 2016.
Woolley, Suzanne. "Dreams of Living Well in Retirement Dim for Americans." Bloomberg. February 22, 2016. http://www.bloomberg.com/news/articles/2016-02-22/dreams-of-living-well-in-retirement-dim-for-americans.