Where women are ahead of men financially
Two words could sum up today's retirement savers: Golden girls.
On two important fronts -- saving and strategizing for their retirements -- women are beating men.
Regarding the first area, new research from Fidelity Investments shows women of every income level -- from $20,000 in annual income to more than $250,000 -- are socking away a larger percentage of their incomes than men in the same income range. That's what Fidelity found after analyzing more than 9 million workers with accounts at the firm.
While that's good news for women, many still may be facing a retirement shortfall, given that women tend to live longer than men and could run out of money in old age. By one estimate, an average 45-year-old woman today will face a retirement savings gap of almost $270,000, compared with about $213,000 for men.
Planning for that longer life span may be motivating women to sock away bigger chunks of their paychecks than their male counterparts.
"At every level, women are saving more than men," said Meghan Murphy, director in Fidelity's Workplace Thought Leadership team. "The psychology behind that is women by nature tend to be long-term planners."
When it comes down to dollars and cents, that means women have more socked away for retirement than their male counterparts in the same income brackets, although that holds true only for Americans making less than $150,000 annually, Fidelity found. For instance, a man in the $60,000 to $80,000 income bracket has about $71,800 in retirement savings. His female counterpart, however, has about $77,300 in her account.
There is a demarcation line where men start to have more in their retirement accounts than women: those earning more than $150,000.
"There are a lot more men in those jobs, and part of it could be women do tend to take time off from workplace to raise children," Murphy said. "We're also seeing more women taking time off to take care of their parents."
The research into women's savings rates jibes with a recent report from Vanguard, which found that women save about 7 percent of pay, compared with 6.8 percent for men.
Women are also beating men when it comes to having good investment strategies, Fidelity found. Women generally take on less risk. The investment firm found that about 54 percent of men take on more risk than they should, compared with 48 percent of women. Yet their investment returns were almost identical.
"We found men and women over a 10-year period have the same rate of return, and women have arrived there with less risk," she said. "You don't always have to have more risk in your portfolio to get the same returns."
Even though women are pulling ahead of men in some regards, a gender gap still exists when it comes to financial literacy, according to new research from S&P Ratings Services. The ratings agency found that 62 percent of American men are financially literate, compared with 52 percent of women.
S&P's literacy survey -- which asks questions about compound interest, inflation, interest and risk diversification -- may reflect that while Americans are getting the message from their employers about saving for their golden years, they may be suffering from a lack of basic financial education on topics ranging from credit cards to mortgages.