Women from all generations have reason to be concerned about whether or not they’ll be ready for retirement due to the retirement gender gap.

The annual Gender Gap in Financial Wellness report found encouraging signs of slight narrowing of the divide between men and women in 2015.1 Despite this good news, women still have a long way to go to ensure they’ll be financially secure and overcome the retirement gender gap.

The report compared what 45 year olds actually saved for retirement versus what would be needed to replace 70% of current income and cover projected health care costs in retirement.

Both the men and women’s savings fell short. But, many women would find it more difficult to make up ground due to the retirement gender gap. Over the course of her lifetime, a woman:

  • Makes less money.
  • Moves in and out of the workforce more than men traditionally do.
  • Lives longer than a man, and faces the rising health care costs that come with longevity.

3 Reasons Why Women Should Be Concerned

1. Income Inequality

Georgetown’s Center for Education and the Workforce found that “college-educated women working full time earn more than a half a million dollars less than their male peers do over the course of a lifetime.”2

Earning less money over time reduces the amount of income from sources women count on in retirement – Social Security benefits, contributions to pensions and retirement accounts, savings to pay off a mortgage or buy a new home, and others. Without these income streams, a woman will find it difficult to match her current standard of living in retirement.

2. The Revolving Door

Women are usually the ones who leave the workforce to take care children and aging parents.  It is time off without pay and without the ability to make contributions to a 401(k) plan, as well as receive any matching company funds.

The Social Security Administration calculates benefits based on an average of 35 years of earnings. When there is less than 35 years of income, they zero out those years, which means a lower amount of benefits received.3

Consider this:

– 25% of baby boomers are caring for an aging parent

– 2 out of 3 caregivers are women

– $350,000 in total lost wages and Social Security benefits 4

3. Living Longer, Outliving Savings

While Americans are living much longer than previous generations, many people haven’t adjusted their retirement strategy to overcome the retirement gender gap and to reflect the possibility they may live up to 20 years beyond age 65. Even though women have a slightly longer life expectancy, both genders would need significant additional savings to cover the anticipated cost of health care.

For example, a 45-year-old woman, who wants to retire at 65, would need $268,404 more beyond what she has already saved. It’s not much better for men. They would need $212, 256 more.

So, what do we do to make sure we’re ready for retirement and that women can overcome this gender gap?

Start saving for retirement as early as possible. And, if you don’t have a retirement strategy in place, meet with your financial representative and get one.

retirement gender gap is real for women

A visual chart showing retirement gender gaps between men and women


1 “2015 Gender Gap in Financial Wellness.” Financial Finesse Reports. © Financial Finesse, Inc.

2 Alicia Adamczyk. “6 Excuses for the Gender Pay Gap You Should Stop Using.” Money > Careers > Wage Gap. Apr. 12, 2016. http://time.com/money/4285843/gender-pay-gap-excuses-wrong/

3 Fidelity Viewpoints. “How to take care of aging parents and yourself.” Fidelity.com > News & Insights > Fidelity Viewpoints > Personal Finance. Jan. 1, 2015. https://www.fidelity.com/viewpoints/personal-finance/caring-for-aging-parents

4 Source: Met Life and Fidelity investments