Despite the economic and professional gains made by women
over the last 50 years, gender gaps persist — and not just in rate of pay.
Retirement readiness and financial know-how are key areas
with notable gaps, according to two studies recently released by the TIAA
Institute. For example, among workers in TIAA’s system, men contributed a
median $8,271 to their workplace retirement plan in 2020, compared with $5,994
for women. While that 27% gap is less than the 34% difference in 2012, it
remains significant.
“There are still considerable gaps in retirement readiness
between men and women, but there has been noticeable progress over the last 50
years due largely to advances women have made in the workforce,” said Anne
Ollen, who oversees the TIAA Institute’s programs and operations.
The research comes 50 years after Title IX of the Education
Amendments of 1972 required gender equity in education programs or activities
that received federal financial assistance. While the law is often associated
with advances in women’s sports, it also contributed to more females going to
college and into areas of study that they previously may have been unable to
access due to discriminatory practices.
For instance, in 1972, just 9.4% of law school students were
women, according to the American Bar Association. Today, 56% of all first-year
law school students are women. In medical schools, roughly half of students are
female, compared with under 10% in 1972, according to the Association of
American Medical Colleges.
Pay gap today means less money for women tomorrow
Nevertheless, a pay gap has persisted: In 1973, full-time
working women earned a median 56.6 cents for every dollar their male
counterparts earned, according to the Census Bureau. Now, it’s about 82 cents
for each $1 earned by men.
Generally, lower pay translates into a lower savings rate,
which has implications down the road. For men aged 50 through 64, median
retirement account balances at TIAA are $221,492 compared with $117,040 for
females in that age range. For participants age 65 or older, men’s median
balance is $491,621 compared with $204,304 for women.
The research also shows that Social Security income — which,
in addition to savings, is key in retirement — is lower for women, whose
monthly benefit averaged $1,437 in 2020, compared with $1,824 for men.
Women also tend to tap Social Security before their
so-called full retirement age, which also means getting less in benefits than
they generally would otherwise. Additionally, women are more likely to have
breaks in their career due to caregiving, which affects both income and
savings, the TIAA research notes.
Men still have a better grasp on finance
As for financial know-how, researchers found that on
average, women correctly answered 45% of financial-related questions, compared
with 55% among men, according to a survey conducted earlier this year by the
TIAA Institute and the Global Financial Literacy Excellence Center (GFLEC) at
the George Washington University School of Business. While baby boomer women
correctly answered 51%, that share is 41% and 38% among millennials and Gen Z
women, respectively.
“Investing is the aspect of financial literacy with the
largest gender gap, but notable differences also exist in borrowing, saving and
insuring,” Ollen said.
“This underlines the importance of equalizing basic
financial education in school and in the workplace,” she said.
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