Retirement Planning for Women

How is preparing for retirement different for women?

Retirement Planning Challenges Only Women Face

Women must approach retirement planning differently than men. While there are always exceptions to the rule, statistics show that women both live longer and make less money than men. These two truths simply require looking at long term planning carefully and preparing in a way that will help to strengthen a woman’s financial future for when she is ready to retire.

A new study released in 2018 by the Institute for Women’s Policy Research asserts that women earn 49 cents to the typical men’s dollar. This is much less than the 79 cents that had been widely reported. Regardless as to which of these figures is most accurate, over the course of a career, that gap in earnings is significant. The same study states that 43% of today’s women workers had at least one year with no earnings, and according to Money Magazine, overall women work an average of 12 years less than men. This leads to less in Social Security and pension benefits, along with loss of time to take advantage of compounded interest and potential employer contribution matches to their retirement plans.

While one may plan to work until age 70, there are factors not always within our control, such as our health or physical ability, that can influence that possibility. Under-employment and downsizing are equally troubling for both men and women, however, the overall impact to a woman’s retirement resources can be greater.

To further underscore a woman’s need to plan differently, her retirement is likely to be more expensive in health care costs. Medical science is keeping us alive longer. Statistically, a 65-year-old woman will live to age 86, and 45% have a chance of living to 90. According to Fidelity Investments’ 16th annual retiree health care cost estimate, as a result of women’s longer life expectancy, they can plan to pay $147,000 as opposed to men’s $133,000.

As inflation eats away at one’s buying power, there is the very real possibility of running out of funds in retirement if careful planning has not taken place in advance. Social security is not enough. The average benefit for women age 65 and older is $14,000 per year. According to the U.S. Government Accountability Office, 16.4% of singles 65 and older live below the poverty line, compared with 5.0% of married individuals in the same age group. Women must be especially cautious to take proper measures now so that they give themselves as much financial security as possible for their future.


What Women Want in Retirement Planning

Women want to know that their future is as secure as possible and that these unique financial challenges they face in retirement can be addressed. What can be done now to prepare?

  1. Saving is very important. Create a plan to consistently set aside money that is earmarked for retirement.
  2. Investing for the future. The stage of her career a woman is in, along with financial and other factors will contribute to determining risk tolerance. A financial planner can use this information to help create an investment plan that is designed for her individual needs.
  3. Tax planning. Take advantage of any appropriate tax benefits that may be available.
  4. Prepare for the unexpected. Review all insurance policies to determine if coverage levels are appropriate or need to be adjusted. Insurance is a way to manage risk as insurance coverage is to protect from potential large unexpected expenses.
  5. Educate yourself. The more you know about your own financial future, and the factors that affect it, the better prepared you'll be to deal with any unforeseen circumstances.
  6. Work with a financial advisor. A financial advisor can help put all of the pieces together to ensure you stay on track for a successful retirement.


While for some of us it may seem that there is still plenty of time to think about retirement, it is never too early to plan. It can be surprising to learn that women face additional challenges to the ones faced by men in preparing for that time but educating yourself about the facts and making wise choices can lead to a more comfortable future.


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