New Study Finds Millennial Women Face Significant Gender Gap in Financial Wellness

Financial Finesse looks at the impact of career breaks on women’s
finances and how to plan for them.

EL SEGUNDO, Calif.–(BUSINESS WIRE)–Women who plan to leave the workforce at any given point in their
careers now have a clearer understanding of how much it may impact their
financial picture and how they can minimize that impact. The 2016
Gender Gap in Financial Wellness Study
, published by
Financial Finesse, a workplace financial wellness provider, has
quantified the potential impact that leaving the workforce at different
points in a woman’s career can have on retirement savings to help them
better plan for the myriad of obstacles they face in the future.

Liz Davidson, CEO and founder of Financial Finesse, says there is
already a significant retirement gap between Millennial men and women.
“Although we assume pay parity for the typical 25 year old,” explains
Davidson, “there is a 28 percent gap in the additional retirement
savings needed to cover estimated retirement expenses primarily due to
women’s greater life expectancy.”

Davidson notes the firm has seen great progress with employers working
to close the gender gap in financial wellness, which is commendable, but
Millennial women need to save an estimated 12.6 percent of pay to be on
track to meet estimated average expenses in retirement. She notes that
“when you add a career break on top of that, the gender gap in financial
security is huge.” She adds, “Women need to know this so they can take
steps to minimize the financial impact of important life decisions.”

According to the study, women who take breaks early in their careers
face a potential retirement savings shortfall of nearly $1.3 million
dollars. Financial Finesse identified the gap between women who remain
in the workforce their entire careers and women who take breaks for such
events as raising children, taking on passion projects that provide
little to no pay, or caring for aging parents.

Kelley Long, CPA/PFS, CFP©, resident financial planner with
Financial Finesse and lead researcher on gender issues for the firm’s
Think Tank, says Millennial women are at highest risk of falling short
because they face longer career spans. That said, they are also best
positioned to proactively plan for any breaks so that these breaks don’t
have a crippling effect on their finances.

“As financial educators, we’re having these conversations proactively
with women,” says Long. “We help them understand that even if all else
is equal, healthcare costs and life expectancy will likely be higher, so
they will have to save more for retirement.” She adds, “If they’re going
to take a career break, they need to prepare for it as soon as possible.”

According to Long, a recent Wells Fargo survey found that 44 percent of
Millennial women say they have not started saving for retirement, yet
many expect to experience a break in pay at some point along their

“The gender gap in retirement preparedness is real,” says Davidson.
“Employers are at the forefront of this issue which is why they are
uniquely suited to address it. They can help women—especially Millennial
women—close this gap by offering early financial mentorship to help them
prepare for what might be ahead so they can make life choices without
jeopardizing their retirement security.”

About Financial Finesse

Financial Finesse is the leading provider of unbiased workplace
financial wellness programs in the country, reaching over 2.4 million
employees at 600 organizations with holistic financial coaching and
guidance that helps employees improve their financial wellness. The
firm’s programs cover every area of financial planning – from basic
money management to advanced estate planning – and cost employees
nothing out of pocket, since they’re offered as fully subsidized
benefits by their employers. Financial Finesse’s programs are proven to
change lives, provided through a variety of channels such as live
workshops, webcasts, one-on-one financial counseling sessions and a
financial helpline by CERTIFIED FINANCIAL PLANNER™ professionals who do
not sell any financial products or manage assets.


Financial Finesse
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