NEW YORK - Fewer than one in five workers will be able to maintain their lifestyle upon retirement, with women being at a disadvantage because of their longer life spans and lower pay, according to a study released Tuesday.
On average, employees are projected to replace just 85 percent of their income in retirement, compared with the 126 percent they would need when factoring in inflation, longer life spans and medical costs, the study by Hewitt Associates found.
The study looked at the projected retirement levels of nearly 2 million current workers of varying ages at 72 large U.S. companies and used actual employee balances.
Of those studied, more than 1.2 million employees (67 percent) are expected to have less than 80 percent of what they would need to maintain their lifestyle at retirement.
Those who don't contribute to 401(k) plans face an even bleaker future. These workers will likely only be able to provide less than 40 percent of their projected needs, according to the study.
The study found 19 percent of workers were on track to be able to maintain their standard of living upon retirement.
Although the same percentage of men and women contributed to retirement plans, women faced an 8 percent greater shortfall in savings.
The biggest reason for the gap was a disparity in pay. Women earned an average of $57,000, and men earned an average of $84,000.
That, coupled with longer life spans and family leave, means women had accumulated 84 percent of pay, while men of the same age accumulated 101 percent.
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