Close the Gender Retirement Gap

Two blue and one pink piggy bank
By Jennifer Norr

6 minutes

Women are falling very short in their retirement savings planning. How can credit unions help?

As retirement plan sponsors and as financial institutions, credit unions can play a positive role in helping women save more for retirement and close the continuing and dangerous gender gap in retirement savings.

According to a 2016 report by the Transamerica Center for Retirement Studies, the median household retirement savings reported by surveyed American women was $34,000 in 2015, compared with $115,000 for men. Even more concerning: Since 2012, the median for men increased by $65,000­—a 130 percent jump—while the median for women didn’t increase at all.

The main reasons for the retirement savings gender gap are well known: Women tend to make less money and live longer than men, according to U.S. Census Bureau statistics. Also, far more women than men leave the workforce, or work part time, to care for their children or parents, according to the 2016 Transamerica study.

The ‘Financial Capability’ Gap

Having less disposable income and less access to employer-sponsored retirement plans has contributed to another serious gender gap, in what the FINRA Investor Education Foundation calls “financial capability”.

FINRA defines financial capability as “a multi-dimensional concept that encompasses a combination of knowledge, resources, access and habits.” A 2016 FINRA research report shows the disparity between American women and men in key financial matters, including:

1. Financial fragility. When you’re barely making ends meet from paycheck to paycheck—and scrambling to find money for a car repair one month and an overdue medical bill the next—saving for your retirement isn’t likely to be your top priority.

In FINRA’s survey, women had more liquidity problems than men. For example, 23 percent of women said they had past-due medical bills in 2015, compared with 18 percent of men. Survey respondents were asked whether they were confident they could come up with $2,000 to meet an unexpected need the following month. Thirty-nine percent of women said they either probably or certainly could not do so, compared with 28 percent of men.

2. Financial knowledge. FINRA posed a series of six questions to survey participants to measure their grasp of such basic financial concepts as interest rates, inflation, risk and diversification, the relationship between bond prices and interest rates, the impact of a shorter mortgage term on total interest payments, and the impact of annually compounding interest. Overall, women were less likely to answer questions correctly. See the graphic, below.

6 Ways to Help Women Narrow the Gap

Credit unions can take action to improve their female employees’ and members’ financial capability.

Devote marketing and public relations resources to targeting financial skills awareness programs specifically to women. Conduct webinars, and/or seminars at branches and in the community. Work with local schools and colleges on programs that teach basic financial literacy to all students.

Encourage employees to promote your financial literacy programs when working with members, especially those who seem at particular risk. Train branch employees in a consultative style of member service. They should be able to use members’ account information and history—and members’ verbal cues—as jumping-off points to direct members to your financial literacy services.

Consider having certified financial advisors in branches, as employees or as contractors. Or make arrangements with advisors who will be available in branches for, say, one day each week to meet with employees and members.

Work with your retirement plan providers to offer employees regular workshops on using retirement plans effectively. Make sure employees who have questions about their retirement plans receive prompt personal attention from plan providers, preferably both online and on the phone.

Ask your retirement plan providers to conduct annual or semi-annual training in how to use retirement savings account tools to set and meet their savings goals.

Collaborate with community organizations that are focused on helping women who need financial assistance.

Be Part of the Solution

As you plan and promote financial capability programs tailored for women, keep these themes and statistics in mind: “Just getting by” trumps retirement savings for women. Sixty-two percent of working men say saving for retirement is currently a financial priority for them, compared with 51 percent of working women. About the same percentage of women (53 percent) say “just getting by—covering basic living expenses,” is a current financial priority, compared with just 36 percent of men, according to the Transamerica Center for Retirement Studies.

Retirement plan participation/contribution rates are lower among women, and falling. Among workers offered a 401(k) or similar plan, 79 percent of men and 75 percent of women choose to participate in 2016. Of those participants, the median contribution rates are 10 percent for men (up from 8 percent in 2015) and 6 percent for women (down from 7 percent).

Most homemakers don’t take charge of saving for retirement. According to an Aegon Center for Longevity and Retirement study, 81 percent of Americans who identify themselves as homemakers are women. Only 40 percent of American homemakers feel “very responsible” for making sure they will have a sufficient retirement.

Fewer than half of homemakers are saving for retirement: Only 44 percent of American homemakers are saving for retirement, and only 30 percent consider themselves to be “habitual savers” who make sure they’re saving for retirement.

Most working women are simply guessing how much they need to save for retirement. When asked which of seven methods they used to estimate how much they’ll need to save, 56 percent of female workers say they guessed, compared with 40 percent of men. Only 5 percent or fewer of female respondents said they used a retirement calculator or worksheet, or had an estimate given to them by a financial advisor, Transamerica reports.

Very few working women have a documented retirement strategy. Only 13 percent of female workers said they had a written retirement strategy, and 41 percent said they had a non-written strategy. Among working men, 19 percent said they had a written retirement strategy and 53 percent said they had a non-written strategy.

An increasing percentage of women want retirement planning help from employers. In each of the last four years, the percentage of women who agree with the statement, “I would like to receive more information and advice from my employer on how to reach my retirement goals,” has increased, from 59 percent in 2013 to 65 percent in 2016.

Almost four in 10 women are likely to get professional help. Thirty-eight percent of working women said they’re likely to use a professional financial advisor to help them manage their retirement savings or investments. This marks a slow but steady increase from 35 percent in 2012.

Credit unions are in a unique position within the financial services industry to help female employees and members counteract the struggles they face in saving for retirement. Leverage the trust that members have in you. Make financial literacy and retirement savings strategies for women a permanent part of your brand.

Jennifer Norr is VP/marketing and strategy at CUESolutions provider CUNA Mutual Retirement Solutions. Reach her at

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