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What extra challenges do women face?

One of the biggest challenges that women face is the unfortunate fact that they tend to earn less than their male colleagues. In 2017, on average women made 80.5 cents for every dollar men made. Because they get paid less, women often feel like they have less income to invest.

In addition, women are traditionally more likely than men to have taken time out of the workforce. Giving birth and raising children are common reasons. Additionally, women are more likely than men to take time off work to serve as caregivers to family members such as aging parents.

The caregiver role often occurs as women are nearer to retirement — in their 50s or older. This results in lost income and also in lost years of saving for retirement. Additionally, women who take time off to serve as caregivers may then have trouble resuming their careers once this role ends.

Then there's the fact that women live longer than men (Do they save as much for retirement?. According to the Social Security Administration, the average life expectancy for women is 81 years versus 76 years for men.

For married women, this can result in becoming single later in life and having to adjust to the financial aspects of that. If the woman has deferred all or most financial decision-making to her husband, this can be quite an adjustment whether she is in the process of saving for retirement or is already retired and now needs to manage her own financial affairs.

Ways to avoid a retirement shortfall

  • Plan for a longer life expectancy: Whether married or single, women need to make saving for retirement a key priority. Take advantage of your 401(k) or similar employer-sponsored retirement plan, fund IRAs, and save and invest via taxable accounts. If you use any sort of retirement calculator, figure in a long life expectancy; 100 is not unreasonable.
  • Ensure that you qualify for Social Security: For women who leave the workforce for long periods of time, it is important you keep track of your earnings and the quarters worked for the purpose of calculating and maximizing your Social Security benefits.
  • Understand your Social Security benefits: If you are married, there is a degree of planning that needs to go into deciding when to claim your benefits as a couple. In many cases, it will make sense for the spouse with the higher earnings record to wait as long as possible before beginning to receive payments in order to maximize the potential Social Security survivor’s benefit for the other spouse. Especially among baby boomer couples, the woman is often the spouse with the lower benefit, so maximizing the potential survivor’s benefit is important in light of the longer life expectancies for women.

It's critical that single women look at the ramifications of taking Social Security as soon as you're eligible versus waiting as long as possible. This decision is an integral part of your overall retirement planning. The breakeven point between taking your benefit as soon as you are eligible and waiting until your full retirement age tends to be somewhere in your 80s, depending upon the particular study.

  • Know your options under Social Security if you are divorced: There is a whole set of rules governing the ability of a divorced spouse to claim a spouse’s benefit based upon the earnings record of an ex-spouse. If you are divorced it is important you understand these rules to determine if you can benefit. There is also the ability to collect a survivor’s benefit from an ex-spouse under certain circumstances.
  • Keep track of retirement plans from former employers: Workers of both sexes are likely to change jobs several times throughout their careers. It is important you manage any old 401(k) or similar retirement plans. You can use services such as Blooom to better manage your 401(k).

Women need to be actively engaged in their own financial success whether married or single. They need to be involved in their own financial planning whether they are doing it themselves or working with a financial advisor. In the latter case, if the financial advisor is not taking you seriously or is talking down to you because you are a woman, fire that advisor and find someone who will treat you like the valued client you are. We recommend using the Ellevest robo advisor, since it allows women to take care of all their financial goals.


Retirement planning is tough for everyone. Life expectancies are longer, meaning your money has to last longer.

Retirement planning for women comes with its own set of issues, including an even longer life expectancy, earnings that are often lower than those of their male counterparts and the greater likelihood of extended periods out of the workforce. Whether doing your own planning or working with a financial advisor, make sure you take these and other unique factors into consideration.

Roger Wohlner Freelance Contributor

Roger Wohlner is an experienced financial advisor, finance blogger and freelance writer based in Arlington Heights, Ill. His expertise includes providing financial planning and investment advice to individual clients, 401(k) plan sponsors, foundations and endowments.


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