Retirement Planning: Why the Stakes Are Higher for Women

How a better understanding of women’s unique circumstances can improve the value proposition of your company’s retirement plan.


Making great strides in the workplace, women are pushing through the “glass ceiling,” taking on jobs and positions that were once unattainable. Though the advancement of women in business has improved women’s circumstances, one area that is often overlooked is retirement readiness. Having the right education and tools is important to help women achieve financial security in retirement. 


While, broadly speaking, men and women may have similar needs when it comes to the basic costs and timing of retirement, women face a number of personal and professional challenges that can make it more difficult for them to achieve retirement security.


Despite gains in education, employment and earnings over the past few decades, women still lag behind their male counterparts when it comes to retirement savings. Research shows that women have about 30% less saved by the time they retire than men do.There are a variety of reasons for this discrepancy, but the net result is that women are achieving vastly different outcomes than men when it comes to securing their financial wellness in retirement.


With women making up 47% of the U.S. workforce,2 it’s important for employers to understand that retirement outcomes are not gender neutral. Employees, and your company’s long-term bottom line, can benefit greatly from engaging more fully in helping employees prepare for retirement.



Women continue to face a wage gap

The disparity in income levels between women and men is the primary reason why men often have more saved for retirement. On average, women earn 83 cents per dollar earned by men.3 Consider also that men dominate 15 of the 20 highest paying jobs, and women with bachelor’s degrees and full-time jobs are paid 26% less than their male counterparts.4 With comparatively less income, this leaves women with less money to allocate toward saving after they’ve covered their immediate expenses.


According to data research from the Organisation for Economic Co-operation and Development (OECD), “glass ceilings” account for 60% of the wage gap, with “sticky floors” accounting for the remaining 40%.Glass ceilings refer to obstacles that stand in the way of women advancing their careers, and sticky floors are scenarios where women are appointed to the bottom of the pay range and men to the top for the same position.6

Research shows that women have about 30% less saved by the time they retire than men do. With women making up 47% of the U.S. workforce, it’s important for employers to understand that retirement outcomes are not gender neutral.

Women experience more career interruptions

Women are more likely than men to be the primary family caregiver and take unpaid time off to care for their own children or relatives. This can lead them to leave the workforce, pause their careers or seek more flexible, part-time jobs that often don’t offer employee retirement savings plans. These pauses or shifts in career trajectory can reduce the total funds saved and accumulated in employer-sponsored retirement plans. And lower lifetime earnings may mean fewer opportunities to save for retirement as a whole.


Women have longer life expectancies

On average, women live longer than men do, so the need to be financially prepared for retirement is increased. As of 2022, the average life expectancy for women is 82.8 years, compared to 78.4 years for men.7  This means that women often need larger nest eggs to achieve the same level of annual retirement income. That’s why for women, having a retirement strategy in place is so important, yet 33% of women employees don’t have one. 8



Women report being less confident about retirement

Differences in attitude and perception contribute to the gender gap in retirement. Though women are similar to men in their goals for retirement, they are less certain about their ability to meet those goals: 36% of women aren't confident they will be able to retire comfortably, compared with 21% of men.9 In addition to the wage and retirement savings disparity, this lack of confidence may also be attributed to a lack of financial education, societal gender expectations or simply their own perception of their investment competence.

Women are less likely to take on investment risk

For women, investing often takes a backseat due to lower lifetime earnings compared to men, as well as an increased focus on caregiving priorities. According to a study from YouGov Omnibus, overall women are less likely to invest than men, with 52% of women revealing they have never invested.10 Without a financial plan that includes investments, women can potentially miss out on the returns that can be earned on their retirement savings over time.



Demonstrating an understanding of women’s unique challenges is key to not only helping deliver better outcomes for female employees, but also improving the recruitment and retention of women within an organization. In order to maximize the value of your retirement plan for female employees, and offer meaningful steps toward improving women’s overall financial wellness, here are some things to consider:


Optimize your plan design

Plan design is one of the most important levers businesses can pull to improve women’s retirement savings. For some women, it’s simply an issue of getting started. For others, it’s about saving consistently at a specific rate. Things like auto-enrollment, auto-escalation and catch-up contributions can help increase participation rates and improve savings outcomes over time. For example, auto-enrollment removes the legwork needed to enroll in a plan, making plan participation easy and convenient. Auto-escalation automatically bumps up a participant’s savings rates annually, helping women contribute more money to their plans without lifting a finger. Catch-up contributions allow those 50 and older to “catch up” on contributions they might have missed out on earlier in their career (due to leaving the workforce, for example).


Tailor the information specifically for women

Men and women don’t just think about retirement differently, they also talk about it differently. And it’s important to have targeted financial education that includes information specific to the concerns and circumstances of women, like navigating retirement planning in the event of a lapse in employment and accessing financial services and products appropriate for their specific situations. This not only helps a vital segment of your workforce feel recognized and valued but also better equips them to build the financial security they want and need to achieve their future goals.


Leverage the right tools

Financial wellness tools can increase female participation, engagement and retention by providing insight into their unique requirements, modeling their financial potential, monitoring their progress and helping them build a financial strategy. The use of these holistic and digital tools can help women understand their stakes in retirement and bring their future finances into perspective.



Boosting women’s retirement readiness can be an influential driver in attracting, engaging and retaining female talent. As women continue to make great strides in their personal and professional lives, it’s important to ensure they do so in retirement as well.

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