First Person: I’m Paying a Financial Penalty for Being Born Female

Yahoo Contributor Network

A new study has revealed something many of us have already suspected: women are more likely to end up poor than men. According to a recent article by Daily Finance, most women think they are better at saving compared to men. However, a survey showed the average man has more in his IRA, 401(k), taxable investment accounts and CDs. The only place where women outdid men was with money market investments, which typically don't pay much of a return. Women had about $13,000 in the money markets compared to $11,000 for men.

Catching up with my husband

My husband has been able to build up more in his retirement accounts since he earns a higher income. According to the SaveUp U.S. Consumer Savings and Debt Report, the average man has $50,632 in his 401(k) compared to $39,320. Since I started working for a new company, I rolled my former 401(k) over to a regular IRA account. My new 401(k) has less than $300 in it, which is pitiful compared to my husband's employer-sponsored retirement account. The study showed the average man has $8,456 in an IRA compared to $4,916 for women. In order to even the score, my husband encourages me to save at least $200 a month into a Roth IRA.

Staying out of debt

Another way I'm trying to avoid a financial penalty for being born female is by staying out of debt. The study showed women owe $34,645 in consumer debt such as credit card, car loans and other lines of credit. Meanwhile, men owe $42,842, probably because they have almost one-third more car loan debt. My husband and I make a commitment to never have more than one car loan at a time. We plan to purchase another car in about 2 years. Before I married, financing a car was always a major financial concern.

Having a longer lifespan

According to research, women live longer than men. One of the biggest financial penalties for being born female is related to longevity. I will need to have more money for retirement as a woman who is likely to live into my 80s or possibly 90s. According to a MassMutual study, women are making a better effort at saving for their retirements. Women now have an average balance that is 38.25 percent of the average account balance of a man, which represents a 5.6 percent improvement compared to two years ago.

Negotiating for a better salary

To close the wage gap between men and women, a lot of experts recommend women negotiate for pay raises. I've heard that advice dozens of time in the past decade, but it seems futile to ask negotiate for increased wages when the company is asking people to take furloughs and instituting pay cuts. Why would I expect to receive more money when my colleagues are receiving less? I've never felt comfortable taking a pay increase at the expense of someone else because I know everyone puts in their best effort.

Some people say women don't get ahead because they don't have a competitive instinct, while others say it's because they take time off to care for children. As a married woman with children, I've never taken any time out of the workforce and I still earn less. However, I've passed on opportunities to take higher-pay jobs because I didn't want to change. I may not have as much of a drive to earn more, but I am careful to save for the future and live below my means. I don't anticipate I'll end up poor unless I live past 100.

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More from this contributor:

Suffering from Middle-Class Retirement Delusion

Breaking My Own Money Rules

Dying as a Deadbeat


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