EL SEGUNDO, Calif.–A new analysis suggests a “groundbreaking gender gap” is having an even bigger impact on Millennial women’s finances than the pay gap.
That finding is among many in the new 2016 Gender Gap in Financial Wellness Report, released by Financial Finesse.
According to the report:
- Even assuming pay equity, Millennial women are falling short in retirement savings. Based on assumed contribution rates, both younger men and women aren’t saving enough for retirement, but the shortfall for a typical 25-year-old woman is 28% greater, the report states.
- This difference is exacerbated when women take career breaks. Based on conservative estimates of wage inflation and time out of the workforce, an early career break can cost women $1.3 million in lost savings, with later career breaks costing less but still having sizable financial impacts, Financial Finesse reported.
- As a result, Millennial women who take early career breaks will need to save 25% during their working years to offset the effects of breaks on their retirement savings, the study says.
“With more employers focusing on pay equity and flexible work environments to allow employees to better integrate work and life, employers are increasingly offering both female and male employees access to financial mentorship programs they can use to ensure that they are preparing financially for important work/life choices,” the company, which provides financial mentorship to workers, said in a statement.
A video featuring Liz Davidson, CEO and founder of Financial Finesse, sharing more on the report and what can be done to help Millennials save more and earlier can be found here.
The 2016 Gender Gap in Financial Wellness Report is here.