Good news, women of New York: On average, you face the smallest difference in wages between the genders of any state in the country. The bad news: You still need to sock away $1.13 for every $1 a man in your state saves to enjoy the same size retirement nest egg.
Women working in New York in 2015 made about 89 cents for every $1 a man earned — the nation’s smallest wage gap. New York also was among the 10 states charting the most improvement in the wage gap from 2007 to 2015, the latest data available, according to a new study by NerdWallet.
Gap narrows in some states
Nationwide, women, on average, earned 80 cents for every $1 men made in 2015, based on median income — up from 77.5 cents in 2007, the analysis of U.S. Census Bureau data shows.
As well, four of the five states that saw the wage gap shrink the most from 2007 to 2015 were near New York — Rhode Island, Delaware, New Hampshire and Connecticut — the data show.
Each year, U.S. women, on average, must put aside savings at a rate of $1.25 for every $1 a man invests in a 401(k), traditional individual retirement account, Roth IRA or other investment plan to save an equivalent amount, the study found.
New York women must invest $1.13 for every $1 to catch up. In Oklahoma — the worst state for wage gap improvement during the same time period — women would need to save $1.37 for every $1 men save there.
More than equal pay for equal work
Both men and women struggle to save for retirement. The National Retirement Risk Index suggests roughly half of U.S. families aren’t saving enough to maintain their standard of living once they’ve retired. But the wage gap can make the challenge more pronounced for women, who live, on average, five years longer than men.
So what’s behind the wage gap? Research indicates the issue isn’t so much that a woman working any particular job makes less than her male colleague; rather, it’s that the odds are greater that he will rise to upper management and earn more.
A 2014 Harvard study suggests women are far more likely to take career breaks for child and elder care, which ends up limiting the number of women working in more time-consuming jobs with little flexibility for family needs.
A checklist for saving for retirement
To help keep the wage gap from expanding into an even larger retirement shortfall, try these suggestions to maximize savings:
- Get the full match on your workplace retirement account. Employers often will match — up to a limited amount — the cash you contribute to a workplace retirement account, such as a 401(k) or 403(b). Your contributions are made pretax, directly from your paycheck.
- Set up a Roth or traditional IRA. IRAs also offer tax benefits to savers who qualify. If you are married and file taxes jointly, a non-working spouse can open and contribute to an IRA based on the working spouse’s income. Try a Roth IRA calculator to see how much you can contribute.
- Use a taxable account. After maxing out tax-advantaged retirement savings accounts, you can invest further in the stock market’s long-term earning power. While there is always some degree of uncertainty when it comes to stocks, taking an appropriate risk can help the dollars you save work harder.
Find the gap in your state
Here are the states where women’s incomes average the most — or fewest — cents on the dollar compared with men, and where the pay gap saw the most — or least — improvement. If your state isn’t on one of these lists, you can find it here.
10 states with the smallest wage gaps in 2015
- New York (Women made 88.7 cents for each $1 men earned)
- Delaware (88.5 cents)
- Florida (86.6 cents)
- North Carolina (85.9 cents)
- Rhode Island (85.8 cents)
- California (85.7 cents)
- New Mexico (84.6 cents)
- Hawaii (84.1 cents)
- Vermont (83.8 cents)
- Nevada (83.7 cents)
10 states with the largest wage gaps in 2015
- Wyoming (Women made 64.4 cents for each $1 men earned)
- Louisiana (68 cents)
- West Virginia (70.6 cents)
- Utah (71.1 cents)
- North Dakota (71.1 cents)
- Montana (72.5 cents)
- Oklahoma (73.2 cents)
- Idaho (73.5 cents)
- Michigan (74.3 cents)
- Ohio (74.7 cents)
10 states where the wage gap improved the most, 2007-2015
- Rhode Island: (Wage gap shrunk 10.96%)
- Delaware: (10.19%)
- New Hampshire: (9.87%)
- Kentucky: (9.28%)
- Connecticut: (9.00%)
- Florida: (8.41%)
- Illinois: (7.96%)
- South Carolina: (7.83%)
- New York: (7.76%)
- New Mexico: (7.55%)
10 states where the wage gap improved the least, 2007-2015
- Oklahoma (Wage gap grew 5.57%)
- Utah (grew 1.35%)
- Vermont (grew 0.40%)
- Texas (no change)
- Idaho (Wage gap shrunk 0.45%)
- Ohio (shrunk 0.99%)
- Nebraska (shrunk 1.21%)
- Georgia (shrunk 1.28%)
- Virginia (shrunk 1.37%)
- Colorado (shrunk 1.37%)
Kevin Voigt is a staff writer at NerdWallet, a personal finance website. Email: firstname.lastname@example.org. Twitter: @kevinvoigt. Jonathan Todd is a data analyst at NerdWallet. Email: email@example.com.