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How can we fight the gender pay gap?

First off, let's all agree that the gender pay gap is not the fault of women. Some folks like to explain it away as being a confidence issue. Women aren't asking for raises, they say.

As Sallie Krawcheck, founder and CEO of Ellevest, remarks, that is total baloney. Women are asking for raises. They're just not always getting them.

So how can we fight the gender pay gap? Supporting policies for a higher minimum wage is a good start. Women make up a disproportionate percentage of low-wage workers. Raising the bar will help level the playing field.

Also, salary transparency seems to play a big role. According to PayScale, women who report their companies are transparent about pay are more likely to make as much — or even more — than their male counterparts. Women who do not feel there is pay transparency at work, on average, make only 97 cents to every dollar men make.

Making sure our male spouses pull some of the weight at home helps too. Women are more likely to be on call for the family and take time off work to handle emergencies such as sick kids. So let's split the “barf duty” and make sure the school nurse has Dad's number too.

The gender pay gap's effect on retirement savings

Of course, because we often earn less, it's harder to save and invest money for our futures. Sadly, on average, women have only 50% of the retirement savings that men have. According to a Student Loan Hero study, roughly 50% of women don't have any savings at all!

According to a study by Willis Towers Watson that asked nearly 5,000 American full-time employees about their financial priorities, only 44% of the women asked named retirement as their top priority. Compare that to 60% of men. Women's top priorities were more likely to involve current financial needs, like putting dinner on the table and paying off debt.

Let's face it: Due to the gender pay gap, women are more likely to be living paycheck to paycheck. And that's terrible news for their retirement savings.

According to Transamerica, the median retirement account balance among women is only $23,000. Compare that to the statistic that female employees expect to need a median of $500,000 saved to feel financially secure in retirement, and it's clear we've got some catching up to do.

Ellevest: a financial product for women

Ellevest's goal is to get more money into the hands of women and bridge the different money gaps that women face. The robo advisor and membership service takes into account not only the information that Betterment and Wealthfront do but also women's particular needs.

That means Ellevest’s investment plans take into account the fact that women are more likely to take more time off work to care for the family, more likely to live longer and — yes — more likely to get paid less.

There are four pricing tiers for Ellevest:

  • Ellevest Essential: Fees are only $1a month with no required minimum balance. This tier gives you a personalized investment portfolio, banking, learning and 20% off coaching.
  • Ellevest Plus: Only $5 a month. This tier includes all benefits of Ellevest Essential with the addition of retirement planning. With this level, you'll be able to rollover a 401(k) or open a retirement account with the help of the Ellevest Concierge Team and get 30% off coaching.
  • Ellevest Executive: For $9 a month, this is the plan that does it all. You’ll be able to invest for specific goals like buying a home or saving for kids. You’ll also get 50% off coaching.
  • Private Wealth Management: Sliding-fee scale, with a minimum investment portfolio balance of $1 million. Here, you'll receive white-glove service and a dedicated team of financial advisors.

What's more, with every membership plan you’ll have access to robust learning resources like email courses and online workshops. Members will also receive 20-50% discounts on sessions with a CFP or Executive Coach. These coaches can help you meet your career goals or even negotiate a higher salary.

About the Author

Kat Peach

Kat Peach

Freelance Contributor

Kat Peach is a freelance contributor for Moneywise.

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