The Unique Challenges Women Face When Planning for Retirement

When women begin their journey into retirement planning, it's vitally important that they understand that a lot of the free tools out there are calibrated toward their male counterparts. There are two major reasons that this becomes problematic:

  1. Women live longer than men (on average).

  2. Women make less money than men (on average).

Admittedly, those two statements are sweeping generalities. Yet, when you synthesize all the available data we have, these are two points that continue to clearly show up across generations and nationalities.

NOTE: I’m not endorsing the “fairness” of those statements, I’m simply sharing them as facts from reviewing the data.

According to Dr. Robert Shmerling from the Harvard Health Blog, “The average lifespan is about 5 years longer for women than men in the U.S.”

Also, many people in the US are living longer than they used to. A report released in February of 2020 by the US Census bureau states that “Americans are projected to have longer life expectancies in coming decades. By 2060, life expectancy for the total population is projected to increase by about six years.”

This extended life expectancy, tied to the reality that women generally live longer, creates a situation where women must plan for retirement differently than men. To make this situation even more tricky, many women have expressed that they feel their financial advisors condescend to them and are not very helpful in explaining the complexities of their investments. This is a tragedy and it shows up very clearly when women and men are tested to see if they understand important concepts about retirement.

The Women’s Center at The American College did a study on Women’s Retirement Literacy. They found that “only 1 in 4 women feel very knowledgeable about planning for income in retirement compared to nearly half of men,” and “89% of women… received a failing grade on a 38-question retirement literacy quiz.”


It is vitally important for women to find people in the financial services field that are trustworthy and understanding.

Not only do women have a lower retirement literacy because many advisors gear their programs toward men, women often make less money than men and are the caretakers for the children as well as the elderly in society.

WiseAdvisor’s article entitled Women Face Unique Retirement Challenges shares data from the beginning of the century:

“The average man retiring in 2000 had 44 years of working under his belt; however the average woman had only 32. This is because women are more likely than men to take time off from work to have and raise children and sometimes interrupt their careers to care for aging parents.” The article goes on to state that “Work interruptions have significant financial consequences. For instance, women's contributions to Social Security cease when unemployed, ultimately reducing the Social Security benefit when they retire. According to the Social Security Administration the average Social Security benefit check for women was $774 per month compared to $1008 for men.”

The American Association of University Women published a report where they found that this gap has not closed over the last 20 years:

“Women working full time in the United States are still only paid 82 cents for every dollar earned by men.” They also found “The pay gap follows women throughout their time in the workforce, and even after they leave the workforce. Employers’ use of women’s prior salary history to set their wages in new jobs means wage discrimination carries forward from job to job, compounding over time. And because women typically are paid less than men during working years, women receive less income than men do from Social Security, pensions, and other sources when they retire.”

The Covid 19 pandemic also showed the world that this inconsistency between women as caretakers versus men as caretakers is still huge. When the childcare providers couldn’t care for children because of lockdowns, women gave up their jobs in much larger quantities than men.

Today, I want to offer hope and an invitation.

My hope is that women will see that they are such a vitally important part of our society that their future health and wholeness matters to everyone around them. I hope that they will take steps to find the understanding they need for creating and maintaining a strong and successful retirement plan.

My first invitation is to give yourself permission.

Permission to dream.

Permission to plan.

Permission to pull back from the care you give to others just enough to care for yourself.

Carve out an hour or two each month and take yourself on a “planning date.” It might sound silly, but even if you only spend two hours a month reading articles or books or budgeting, it will do wonders to advance your retirement planning and your knowledge of what is out there for you.

Obviously, my other invitation is that our team at Merit Advisors would love to help, but even if you choose not to work with a financial advisor, please take the time to read about the subject of retirement and make a plan.

Please understand that the free tools that are made public are often created with the average male in mind and that they will need to be adjusted for the life expectancy of a female.

Finally, give yourself permission to celebrate your journey through the years.

There is wisdom, freedom, and contentment that come with age.

To grow old is a gift and a treasure and it is worth planning for. If I do nothing else today, I want to push back against the message that women have to cling to their youth or become irrelevant. I wouldn’t be where I am today without the wisdom of the women who came before me who created a legacy for future generations. Your worth and value does not diminish with time and you are worthy of having a strong and secure retirement plan.

  • Make solid, clear goals.

  • Take small steps each day, month, and year.

  • Watch your plan become a reality.

I can’t fix the errors of an entire society that has created these challenges for women, but I can push back against it and do all I can to see women find education, encouragement, and success.

9 views0 comments