It’s often said that women naturally put others first, which, admirable as it is, can become a problem in terms of their own financial future.  A new study by the ING Retirement Research Institute shows that women, on average, are much less prepared for retirement than men.  Fewer women have formal investment plans in place (only 25%); those that do have a retirement plan have over $40,000 less than their male counterparts in those savings plans.

There is no question that women need to do more in terms of saving for their retirement.  At ages 65 and older, the majority of women in today’s society are single, which means they need to have a plan for funding their retirement.  Before we can start to search for a solution, it’s important to pinpoint the causes.   What is holding women back?

We must start with the most obvious: women are oftentimes mothers.  Although times are changing and more women are heading out into the work world, the fact that the majority of households have women as the main caretakers for the children is a major obstacle in planning for retirement.  The study showed that women on average have $41,000 less in their retirement savings than men, with a $149,000 to $108,000 spread, but that gap gets even more significant when women have children at home.  That $41,000 disparity grows to $61,000 with those women having only $88,000 in their retirement savings accounts.  This number can be attributed to the fact that mother’s spend more of their working years as caregivers rather than breadwinners, which can lead to deficits in their earnings, savings, and Social Security.

Despite the fact that the gender wage gap is becoming smaller overtime, many women fail to capitalize on the skills that they bring to the work force.  These skills can often be a women’s greatest financial capital through her adult years.  Women often fail to see these skills, which makes them much less likely to negotiate for pay raises or benefit increases.  They also don’t take advantage of what their employers offer.  On average, only 65% of mothers are receiving their employer’s full company match while 76% of fathers are.  That is money waiting for women to reach up and grab, but 35% fail to make the stretch. The unfortunate truth is that only 35% of women have spent time thinking about their retirement, which is a big indicator as to their lag in savings.

Another reason many women are unprepared is that they simply don’t feel comfortable in the financial arena.  Financial Planning is a profession that is male-dominated, which leaves many women untrusting of those advisors.  66% of all women indicated they received their financial guidance from family members or friends.  Furthermore, trends show that women often prefer to get their information from sources where they can anonymously research and make decisions, such as blogs, websites, social media sites and so on.  While these sources are valuable assets, including a qualified advisor in retirement planning can help men and women navigate the complicated waters of investing.

One other issue that inhibits women from proper planning is their scope of the issue. Only 28% of women have calculated what their retirement will cost.  This follows the long standing stereotype that women avoid numbers and calculations.  Many times, when women hear about a 2% return annually on their investment, they don’t respond as enthusiastically.  If they change their vantage point to a more tangible result, such as an investment leading to their daughter avoiding student loans, they tend to be more interested in the planning.  Because of the limited and technical vantage point, many women find it easiest to simply avoid the issue altogether.

The hard truth is that women are saving less but living longer and, often times, are living their longer lives independent of men.  This lack of savings can lead to outliving their finances, the inability to afford long term care or burdening their children, all of which are major concerns on the minds of most women.  So it may seem that despite the money spent on cards and flowers this past Mother’s Day, the most valuable gift for these women is simply a conversation about their financial plans for the future.  It doesn’t look as pretty in a vase but it certainly will bloom for much longer.