Building Better Retirement Strategies for Women


Much of the retirement savings advice offered online, and even by financial professionals, is intended for a wide audience. Unfortunately, it often doesn’t take into account the needs that specific groups may have—including women.

Because of factors like the wage gap between men and women and differences in financial literacy, women can benefit from retirement advice specifically tailored to their unique experiences. Steps like self-advocacy, financial education, and establishing financial building blocks can help them better prepare for retirement.

Key Takeaways

  • Women have longer lifespans, on average, so long-term savings and retirement planning needs to take life expectancy into consideration.
  • The gender wage gap puts women at a disadvantage when planing for retirement, and the disparity exists across industries and education levels—even more so for older individuals and people of color.
  • Taking steps including self-advocacy, financial education, and establishing financial building blocks can help women better prepare for retirement.

The State of Women’s Retirement Savings

Data consistently show that women are less prepared for retirement than men. The U.S. Census Bureau’s Survey of Income and Program Participation (SIPP) found, for instance, that women ages 55 to 66 are more likely than men to have no retirement savings. 

And of those who do have retirement savings, women in that same age bracket are less likely than men to have saved $100,000 or more. Less preparation also means women are at greater risk of running out of money during retirement.

A variety of factors contribute to these trends—and to the overall need for retirement savings advice that is more tailored to women—including longer lifespans, the gender wage gap (in 2022 women made only 82% of what men did), the time women may spend outside of the workforce caring for family and other loved ones, and even a lack of financial knowledge and confidence.

Here’s a look at how each of these factors contributes to women’s lack of retirement preparation:

Women Live Longer 

According to data from the National Vital Statistics System for 2021 (the last year for which data is available), life expectancy in the United States is 76.4 years. But there’s a considerable divergence between women’s and men’s life expectancies—women have a life expectancy of 79.3 years, while men have a life expectancy of just 73.5 years.

The nearly six-year difference between men’s and women’s expected lifespans plays an important role in retirement planning for both sexes.

“One risk that threatens women’s retirement security is the unexpected, premature death of a partner,” says Valerie Leonard, a financial advisor and CEO of EverThrive Financial Group in Alabama.

Imagine a married, heterosexual couple that has retired without savings and only their two monthly Social Security checks to support them. If the husband passes away, the wife has suddenly lost a considerable portion of her household income (even though Social Security will pay her the higher of the two benefits following the death of a spouse). 

Because of women’s longer lifespans, it’s critical to approach retirement planning from a different perspective. Not only must women calculate the savings they will need and appropriate withdrawal rates during retirement based on their own life expectancies, but they also must put financial safeguards in place to prepare for the passing of their partners.

Work Experiences Put Women at a Disadvantage 

Women’s experience with the workforce significantly impacts their ability to save for retirement. First and foremost, women are generally paid less than men. According to the latest data from the U.S. Bureau of Labor Statistics, full-time working women are paid 83.7% of what their male counterparts are paid. That disparity exists across all different educational levels and industries.

And not all women experience the wage gap evenly. The disparity is even greater for older women and women of color.

The wage gap, “coupled with being out of the workforce to family obligations, translates to a more than 1-million-dollar lifetime gap at retirement,” says Cary Carbonaro, a certified financial planner as well as a senior vice president and director of Woman and Wealth Services at ACM Wealth.

A woman’s lower wages affect her ability to save for retirement in more ways than just having less money to budget each month. First, people often set a specific percentage to save for retirement. If both a man and a woman designate a 15% savings rate but the man makes more money, he will also save more. And with compound interest, his savings will grow faster and larger than hers will.

A second important factor: Employer contributions to employee retirement accounts like 401(k)s are often based on a percentage of wages. For example, an employer might agree to contribute up to 3% of each worker’s salary to their retirement plans. That means the higher a worker’s wages, the more retirement contributions they can receive from their employer.

Finally, Social Security earnings are based on a worker’s earnings during their lifetime. Because women tend to get paid less during their working years, they also receive, on average, only 80% of what men receive in Social Security benefits.

Time Away From Work

In addition to a woman’s lower wages, we must also consider how traditional familial responsibilities can impact the ability to save.

According to the Bureau of Labor Statistics, in 2022, 72.9% of mothers and 92.9% of fathers with children under age 18 were either working or looking for work. The discrepancy in these statistics between women and men makes it clear that mothers are far more likely than fathers to exit the workforce while they have children.

During those years when women aren’t working, they also aren’t contributing to their own retirement accounts.

Even women who have rejoined the workforce—or never left it to begin with—may see their retirement savings impacted by their family duties. Mothers are more likely than fathers to work part-time and, even when working, are more than 10 times more likely to leave work to care for sick children.

Women’s familial responsibilities often extend past just their children, too. 

“Women ages 40 to 50 are considered the “sandwich generation” and, many times, are forced to care for both children and adult parents at the same time,” EverThrive Financial Group’s  Leonard says.

Adult daughters spend more than twice as much time as adult sons caring for elderly parents. And like women who leave work—either temporarily or permanently—to care for children, devoting time to family instead of working can affect women’s standing at work, their wages, and ultimately, their retirement savings.

Many Women Lack Financial Confidence 

A final factor that may impact a woman’s ability to save for retirement is her financial literacy and confidence—or lack thereof. 

The Investopedia 2022 Financial Literacy Study found that women are less confident than men when it comes to their perceived financial knowledge. While most women (63%) said they feel they have advanced knowledge of practical know-how when it comes to finances, only 1 in 3 feel they understand traditional financial products like insurance, investments, and savings—which are key components of retirement planning.

In 2023, a Morgan Stanley study found 36% of women aren’t confident they’ll be able to retire comfortably, compared with just 21% of men. 

Similarly, U.S. Bank found 46% of Boomer women, 53% of Gen X women, and 71% of Millennial and Gen Z women felt confident in their ability to manage their finances, versus 49%, 63%, and 75% of men in the respective generations.

This faltering confidence can lead women to shy away from managing their own finances and perhaps handing it—and even their retirement planning—to male partners. Carbonaro has seen this effect up close, even among teens.

“I did a presentation at a wealthy high school and asked the girls, ‘how many of you will be taking care of your future finances?’” says Carbonaro. “Less than 5% of the hands went up. These were girls aged 14 to 18. Fear is a big reason.”

Girls and young women may be taught primarily through a lens of “be careful with money” with lessons about how to budget, save money, and overcome impulsive shopping habits, while men are encouraged to earn and invest.

“To me, it’s clear that we are not doing enough between elementary school and high school to equip these young girls and build their confidence so that they feel they can take control of their financial future,” Leonard says.

What Women Can Do 

Much of the information we’ve shared so far can paint a bleak picture of women’s prospects of a comfortable retirement. The good news is there are plenty of steps women can take to improve their financial literacy and their retirement savings plans.

Advocate for Yourself in the Workplace 

One of the most important things women can do to improve their retirement prospects is to advocate for themselves at work.

“Advocacy is extremely important in the workplace, and it starts with helping women understand their own worth and weaknesses that can be strengthened,” Leonard says. “Building confidence, resiliency, and negotiating skills in women is critical to success in the workplace.”

Some of the things women can advocate and negotiate for include higher wages, higher retirement contributions, and better family leave policies. Of course, male partners and colleagues can and should also lobby employers to improve pay and benefits for women.

“Getting male counterparts and other women involved in the conversation can help promote women’s disparity issues,” Leonard says.

Advocacy also doesn’t have to end at women’s own workplaces. Eleven states and the District of Columbia have enacted paid family leave programs. Similarly, 16 states and the District of Columbia require paid sick leave for private-sector employees. These policies can make it easier for women to remain in the workforce while also tending to family duties.

Seek Educational Resources

In addition to Investopedia, reputable sources for financial education such as the following can help close the knowledge gap for women:

Additionally, many banks and credit unions offer financial literacy and education programs that may be free for current account holders. These programs can help you learn everything from balancing a bank account to investing for retirement.

Make a Plan for Retirement

The earlier and more diligently you start saving for the day you leave the workforce, the more prepared and comfortable you’ll be when that day comes.

First, designate a certain percentage that you’ll set aside for retirement each month. Experts generally recommend saving 15% of your income, but you can choose a number that fits within your budget. And if you’re unsure of how much you can save, start low and commit to increasing your savings by a certain percentage each year.

Make sure also to plan for how you’ll stay committed to your retirement plan if you take breaks from the workforce. While you won’t be earning employer retirement contributions or accruing working years toward your Social Security earnings, you can still save.

“Don’t forget that stay-at-home parents may still be eligible to contribute to an IRA. If you’re married, file a joint federal income tax return, and earn less than your spouse, an IRA contribution can still help keep you on track for retirement,” Leonard says.

The Bottom Line

Women may be at a disadvantage when it comes to retirement savings because of their longer lifespans, lower lifetime wages, and lack of financial literacy. But by starting with the building blocks—self-advocacy, education, and budgeting—women can take steps to improve their retirement prospects and level the playing field.

“We have to teach women how to organize their finances so that they’re prepared for their journey, we need to help them understand the basics of managing cash flow so they can put one foot in front of the other, and we need to demonstrate how to put emergency and retirement savings on autopilot,” Leonard says.


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