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‘Women are most often the ones who make compromises’ — the gender wage gap hasn’t changed much — but women’s retirement fortunes could improve with a little more planning

A woman’s earnings not only affect her current expenses, but also her future savings, Social Security benefits and overall comfort in retirement — a stagnant gender wage gap doesn’t help at all. But that’s where the gender wage gap is, according to a recent Pew Research Center report, which found the parity has remained about the


A woman’s earnings not only affect her current expenses, but also her future savings, Social Security benefits and overall comfort in retirement — a stagnant gender wage gap doesn’t help at all. 

But that’s where the gender wage gap is, according to a recent Pew Research Center report, which found the parity has remained about the same over the past 20 years. Women earned 82% of men’s earnings in 2022, according to the study of part-time and full-time workers. That’s only marginally better than in 2002, when women earned 80% of what men did. 

While it’s still better than what the gap was in 1982, when it stood at 65%, the current status could still spell trouble for women in retirement. 

“They have to be extra vigilant in terms of saving,” said Stephanie Richman, a certified financial planner and regional director at EP Wealth Advisors. Less money in a paycheck could mean a lower Social Security benefit, less in a 401(k) from employee and employer contributions and not as much cash to save elsewhere for the future. Women also tend to live longer than men, so they have to stretch those savings to last their lifetimes. 

Younger generations are doing better. Younger women earned 8 cents less on the dollar than their male counterparts, compared to their older cohorts who had that 18-cent gap. 

Still, there are a few tasks women should consider when planning for retirement: 

Plan for a long life

When calculating how much money you’ll need to save, or withdraw during retirement, assume you’ll live a long life, said Liz Windisch, a certified financial planner at Aspen Wealth Management. “Most important is plan on living well into their 90s and plan for longevity risk,” she said. Some of this time (or all of it) may be spent single, so account for how to pay for everyday expenses and healthcare as one person, instead of potentially joint income with a spouse. 

As part of this planning, review insurance options and think about long-term care, such as home health aides, nursing homes or assisted-living facilities. Medicare does not cover most of those costs, which is why some people opt for long-term care insurance (or at the least, make a plan with family and friends regarding their finances and care wishes). 

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Take into consideration all sources of retirement income, and try to find ways to supplement that income, such as taxable brokerage accounts or estimates for Social Security benefits (you can find that by making an online account with the Social Security Administration). 

Save, save, save 

Think about all the ways to save, such as employer matches in retirement accounts or spending less on interest payments for credit cards, said Ralph Bender, a certified financial planner and chief executive officer of Enduring Wealth Advisors. “Because they make less and live longer than their male colleagues, women must save a larger percentage of their current income to offset the smaller Social Security or other pensions they’re likely to receive during retirement,” he said. 

A Roth IRA, which is funded with after-tax dollars, should be utilized as early as possible, since it can act as a backup emergency account, Bender said. Distributions are tax- and penalty-free when Roth IRAs have been open for five years and accountholders are 59 ½ years old, but the individual’s own contributions to the account can be withdrawn without issue at any age.

A separate, liquid emergency account is also beneficial to have, so that retirement assets can continue to grow as long as possible. 

Consider the ‘what if’s’ 

There are so many potential situations that can derail a woman’s retirement, such as a divorce or a death in the family. When making any decision, think of the possibilities — good and bad — and plan for them, said Kassi Fetters, a certified financial planner and owner of Artica Financial Services. “Understand what it would look like if you got divorced or your spouse was to pass away,” she said. “Making decisions out of fear is never good so know your options.” Take this time to also review, or create, your own will and check that your beneficiaries are named as you want them to be. 

Becoming a caregiver for a child or older, sick loved one is important work, but it can be an obstacle to a comfortable retirement. When taking time off from work, or shortening work hours to act as caregiver, women should create a plan with their spouse or family to continue building a nest egg.

 “Women are most often the ones who make compromises with their career to support the needs of having children,” Fetters said. “Even if a woman only takes a few years off, or continues to work part time until the children go to school, that time is critical in bolstering her career, and in turn her income.” 

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Ask for help when you need it 

A financial adviser can help review assets and debts, spending and savings habits, investment and insurance options and tax liabilities, and as such, create a financial plan for retirement. Not everyone can afford working with a financial planner, but there are professionals who offer their services on an hourly basis. Getting a check-up, or having an annual meeting, could be a way to stay on track, or fix any problems early on. Make sure you’re working with a qualified professional who is acting in your best interest

“The bottom line is, you only have one life to live and you want to ensure you’re living your best life now, but also that it doesn’t jeopardize your future,” said Crystal Cox, a certified financial planner at Wealthspire Advisors. “Financial planners can help find the right mix, given your resources, risk tolerance, and goals.”

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