Skip to Main Content

Start Of Main Content

Facts you need to know about women and retirement

Why retirement planning differs for men and women and how women can narrow the retirement savings gap.

Three women discussing women and retirement

Women often face unique challenges when it comes to planning for retirement. As a result, many find they haven’t saved enough to support the kind of retirement they envision. But these challenges can easily be overcome with the proper support, resources and planning.

Here are five facts about women and retirement, along with some tips for how women can narrow the retirement savings gap:

1. Women tend to earn less than men

For every dollar men earn, women only earn about $0.84, leaving them with less money to put aside for retirement. Over an entire career, that difference can really add up.

Tip: The key is to start saving for retirement as early as possible. Women should explore all retirement savings options such as a traditional IRA or a Roth IRA in addition to any employer-sponsored retirement plans that might be available.

2. Women generally live longer than men

On average, women live about five years longer than men. This means they’ll likely spend a few more years in retirement than men and that they will need to accumulate more in the way of retirement savings to support them.

Tip: Women should consider working longer if they can. This will enable them to accumulate more savings.

3. Women may have more gaps in their career than men

Even though this trend is shifting, women are more likely than men to step away from the workforce to take care of family members. These gaps in employment limit the opportunities women may have to save for retirement through an employer-sponsored plan.

Tip: During gap years, if married and filing jointly, women may still be able to contribute to an IRA on the basis of their spouse’s earnings through a spousal IRA.

4. Women tend to be more risk-averse than men

When it comes to women and investing, they are more likely to be risk-averse, which can sometimes limit the long-term growth potential of their retirement savings.

Tip: Women shouldn’t be afraid to seek advice from a financial professional because they can help develop a needs-based retirement planning approach and develop a well-diversified retirement savings plan.

5. Women generally retire before men

In the U.S., the average retirement age for women is 63 and for men it’s 65. While two years may not seem like a big difference, it can create some significant challenges for women in retirement. One of those challenges comes from the fact that if women are retiring sooner than men, then they won’t have as much time to save for retirement. Additionally, since women are retiring sooner, they’ll also have to start taking withdraws from their retirement savings sooner.

Tip: Prior to retiring, it’s important for women to develop a well-thought-out retirement budget that will last, and/or consider working part time during retirement.

A variety of factors can result in women saving less for retirement than men, but starting early and consulting with a financial professional can help women take control of their financial future.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

Neither State Farm nor its agents provide tax or legal advice.



Also Important

Retirement Accounts: Overview and Compare

Retirement Accounts: Overview and Compare

Robust retirement plans with a variety of investments can help you reach your retirement savings goals. Find out which options are right for you.

The 3 Main Barriers Preventing Women from Preparing for Retirement

The 3 Main Barriers Preventing Women from Preparing for Retirement

Retirement for women comes with a unique set of challenges. We describe the barriers and how to overcome them.

Related Articles

Good Reasons to Keep Working After Retirement

Good Reasons to Keep Working After Retirement

The most common occupations that seniors take after retirement tend towards part time, flexible schedules. Here are some reasons why you should consider working after retirement.

Will Your Retirement Savings Last?

Will Your Retirement Savings Last?

These strategies can help you have enough.

5 Ways to Help Your Retirement Savings Go Further

5 Ways to Help Your Retirement Savings Go Further

If you suspect you haven't saved enough, it's time for strategic retirement planning.