A "shocking" reality for U.S. moms: Half have no retirement savings

On Mother's Day, the best gift for your mom might be a contribution to her 401(k) or IRA plan, with research revealing a significant gap between moms and dads in financial preparedness for retirement.

About half of mothers across the U.S. have zero dollars in retirement savings, compared with roughly one-third of fathers who are unable to put money away for their later years, according to a recent analysis from The Century Foundation, which examined data from the Financial Health Network, 

The findings highlight a troubling and pervasive lack of retirement readiness for millions of mothers, who are much less likely to save because of factors including a persistent gender pay gap and because moms are more likely than fathers to take time off from work to care for children. Giving up a job also stunts their potential Social Security benefits given that the program is based on a person's highest earnings over 35 years. 

"When you see half of moms don't have any retirement savings, that's a really shocking statistic," said Laura Valle Gutierrez, a fellow at the Century Foundation, a progressive think tank, and the author of the new report. 

• Women lose out on $900,000 in earnings in their lifetime due to pay gap

She added, "Moms are really the ones paying the cost for a system that doesn't properly value care work."

The gap between fathers' and mothers' retirement savings is also evident among workers with full-time jobs, who are more likely to have access to retirement benefits than people who work in part-time jobs or gig work. About 73% of dads in full-time jobs have a retirement account, compared with 66% of mothers, Gutierrez found. 

"One of the things that surprised me is how persistent this gap is, no matter how we cut the data," Gutierrez noted. 

The reason, she added, traces back to several issues that have had a compounding impact on mothers' financial health. They include the wage gap, where women earn less for doing the same job as men, and occupational segregation, which describes how women tend to be funneled into lower-paying careers like teaching while men are often encouraged to train for better-paying jobs like engineering.

Family care responsibilities also commonly inhibit mothers' ability to save for retirement, especially if they scale back work to look after children, parents or other relatives. 

"Moms are doing this lifetime of caring and working for their families, and when it comes to retirement they are just unprepared and aren't able to go into retirement securely," she said. 

Retirement insecurity

To be sure, a lack of retirement readiness isn't only a problem for women who have kids. But the bigger gaps for moms mean that they are more likely than fathers to head into old age without enough money to support themselves comfortably. 

It also helps explain why the poverty rate for older women is higher than for men, with 16% of women over the age of 65 living in poverty, compared with 12% for men of the same age. 

This lack of retirement readiness has implications not only for individuals and their families, but also for the nation as a whole, according to the Pew Charitable Trusts. About 56 million private-sector workers don't have access to a retirement plan through their employers, feeding into a projected $1.3 trillion shortfall for state and federal governments through 2040, a new study found. 

"Many of these retiree households will need social assistance," noted John Scott, project director of retirement savings at the Pew Charitable Trusts, in a Thursday conference call to discuss the research.

For instance, older Americans without savings are more likely to tap programs like food stamps to keep afloat. And women with children are reaching their pre-retirement years with less saved than either fathers or people without children, the Century Foundation research found. 

Aging without savings

Among mothers who are 50- to 64-years-old, only 23% have more than $100,000 saved for retirement, the analysis found. Among the same age group, about 42% of fathers have saved at least that much, and 37% of people without kids in that age bracket have at least $100,000. 

There are ways to fix the retirement system to make it easier for mothers — and others who struggle to save — to put away money for their golden years, experts say. For example, an automated retirement program run by states could help workers who don't have access to workplace plans, Pew noted. 

"If you are a worker that doesn't have a plan like a 401(k), you would be automatically enrolled in the state savings program," Scott noted. "If you did nothing you would automatically enroll and start contributing to an IRA."

Another idea is to change Social Security so it financially rewards caregiving. The Social Security Caregiver Credit Act, which was introduced by Democrats in 2021, would provide retirement compensation to those who take time off from work to take care of children, elders or others. But with today's divided Congress, such efforts aren't likely to move forward.

"On Mother's Day, when we thank moms for all the work they do, we want to make sure we thank them as a society — and making sure they have a financially secure retirement is one way," Gutierrez said.

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