The huge retirement penalty for being a mom

Granted, 401(k)s are nobody’s first-choice topic on Mother’s Day. But it’s a discussion you don’t want to put off too long. Women raising kids face a higher degree of difficulty in putting money away, and they also face steeper costs in retirement. So it’s no surprise that nearly half of women raising kids are “not too confident” or “not at all confident” about retirement, according to a recent Transamerica survey. That compares with 36% of men with kids.

Not that men don’t face retirement challenges too, but mothers tend to have fewer options. And they end up with far less in earnings compared with men—a pay gap of$500,000 or more over a career for the typical female wage earner. The cost is even higher in retirement benefits. Here’s a look at five of the biggest hurdles to a comfortable retirement:

1. Moms generally earn less…

It’s a well-known fact that women get paid only 79¢ for every dollar a man earns. And women are nine times more likely than men to work part-time or stay at home because of care-giving responsibilities, which may include another family member, such as an aging parent, as well as their own children.

Because of these career interruptions, women typically work about 12 years less over their working lifetimes, compared with men. And when they re-enter the workforce, many have a hard time resuming their higher paid jobs, which further drags down their lifetime earnings. That’s an unfair penalty, especially considering the six-figure economic valueof mothers’ work at home

2. …so they save less for retirement…

Since mothers generally earn less, they have fewer dollars available to put away for retirement. Women are also less likely to be offered retirement benefits in the workplace, in large part because they work part-time. The median 401(k) balance stood at $24,446 for women, vs. $36,875 for men, according to a 2015 Vanguard survey.

Even when saving opportunities are offered, mothers often fail to take advantage of them. Women with children at home are the least likely of all groups to save at the maximum level allowed by their employer’s retirement plans, one study found. Or even to contribute to the full match level—just 65% did so, versus 80% for men with children at home.

Stay-at-home moms face an even higher retirement risk: dependence on a spouse. A2015 Aegon survey found that 75% of homemakers (who are mostly women) view their spouse’s income in retirement as very or extremely important. More than half earn less than $30,000 a year in personal income, and just 30% save regularly on their own. Given the risk of divorce, it’s no surprise that many single moms end up struggling f-rom paycheck to paycheck.