Closing the gender gap

Women make less, pay more and save less for retirement. Here’s how to take control and reverse the damage.

April 12, 2016, marks Equal Pay Day (as designated by the National Committee on Pay Equity). The date symbolizes how far into the year women have to work to earn what men did in the previous year. According to the White House, the median wage of a woman working fulltime year-round is about $39,600, only 79 percent of a man’s median earnings.

On top of making less money, women are being charged more for the products they buy.

A study of more than 800 items by the New York City Department of Consumer Affairs found women are charged more than men 42 percent of the time for identical products.

This “pink tax” can be found on everything from toys to clothing to personal care products. Another study looking at service providers in California found that over a lifetime, a woman will pay $1,300 more than a man for the same services.

So women are earning less and paying more. Not to mention, women work, on average, 12 fewer years than men do over the course of their careers, often because they take time off work to raise kids or take care of sick spouses or aging parents.

It should come as no surprise then that women are falling behind when it comes to saving for retirement. The average 45-year-old woman has $20,000 less in retirement savings compared to the average 45-year-old man.

As a husband and father of three young girls, these statistics hit home for me as I think about the future. But I believe women can close the gender gap. I advise women to take a few steps to reverse the trend:

Take inventory

It’s important to know what you have and where it is. Write down all your account information — investments, bank accounts and savings accounts. Take inventory of all sources of current income, and talk to your spouse before it’s too late. I work with many women who don’t have information about their money and investments after their spouse passes or after a divorce.

Save, save, save

Women must save more than men do because they generally live longer. Wives live eight to 10 years longer than their husbands if they’re married when they’re the same age. A recent survey shows women are saving 7 percent of their salary, but I’d like to see that number even higher.

I recommend dedicating 10 to 15 percent of your salary to your 401(k) or other retirement accounts.

Always negotiate salary

The majority of women feel like they’re underpaid, but only 43 percent have asked for a raise. However, three out of four who asked for a raise got it.

Don’t be shy about asking for a raise if you can back up your request with some reasons why you deserve it.

Learn to say no

A bleeding heart can be murder on a budget. Women will often fund their children’s education before their own retirements. They may be likely to loan money to relatives that may never be repaid.

Women need to pay themselves first. It’s similar to flying: The flight attendant tells you to put the oxygen mask on yourself first, before assisting family members.

Homemakers take control

Even if you don’t work outside the home, it’s your retirement, too!

Take an active role in the planning process. If you and your spouse file a joint tax return, you can each open an Individual Retirement Account, even if you have only a single source of income. As of 2015, you can contribute up to $5,500 a year to an IRA. If you’re age 50 or older, the contribution limit goes up to $6,500.

Skip Johnson is an advisor and partner at Great Waters Financial in New Hope, a financial planning firm and Minnesota insurance agency. Skip also offers investment advisory services through AdvisorNet Wealth Management, a registered investment advisor. Learn more at