Why Women Need to Save for Retirement

Women face unique barriers to saving for retirement.  At the same time, they have greater savings needs.  Here's how to fix the problem.

When it comes to retirement savings, women continue to lag behind men. Only 44 percent of women contribute to their employer’s retirement plan, and the median amount saved for retirement by men is 56 percent higher than that saved by women. Many married couples assume that, as long as the breadwinner (often a man) saves for retirement, the other partner doesn’t have to worry about it. Is this true? In a word, no.

Why Aren’t Women Saving More?

The unique challenges and life transitions faced by many women tend to impede their retirement savings success. While not true of all women, the following barriers may be contributing to your dismal retirement account:

Risk aversion:

Being too conservative with your investments can lead to low returns that may not even keep up with inflation. Some women are so risk averse that they neglect to invest at all.

Being out of work:

Between raising children, caring for elderly relatives and being a homemaker, women are often in and out of the workplace throughout their careers, more so than men. On average, women work 13 years less than men, during which they often don’t contribute to a retirement account. Switching jobs and transitioning in and out of work makes it difficult to keep your employer-sponsored plans straight, too, and many women neglect to roll over old accounts or enroll in new ones.

Earning less:

Some studies have indicated that

women actually contribute a higher percentage of their earnings to their retirement accounts. However, because women only make about 81 cents for every dollar earned by a man, their total amount of savings is still lower. Women are also more likely to work at part-time jobs where an employer-sponsored plan is not available—nearly 26 percent of working women worked part time in 2015, compared with less than 13 percent of men.

Being busy:

It can be difficult to balance the rigors of raising children, running a home and caring for elderly relatives. A stay-at-home mom can’t punch out at the end of the day, which leaves little time or energy for thinking about retirement. Full-time workers don’t have to do much to enroll in their company’s plan, and they can usually set up automatic deposits. Without an employer plan, saving for retirement takes extra energy that many women just don’t have.

Lack of understanding:

Both genders report feeling confused by financial jargon and have difficulty understanding their retirement options. The difference is that men tend to save and invest anyway, whereas women find the confusion immobilizing. It doesn’t help that financial advice has historically been geared toward men, so women have not necessarily been raised to think about retirement in the same way men have.

Why Do Women Need to Save More?

Women not only need to save more than they’re currently saving, but in many cases, they need to save more than men, too. Even happily married, stay-at-home moms should be saving money for retirement. A combination of factors makes retirement savings even more important for women: 


People are living longer today than ever before, and women tend to outlive men by about seven years, on average. That means they will likely have a longer retirement to fund. Additionally, if your husband dies first, your retirement savings may be eaten up by his health care costs prior to death.


Because men often die first, many women experience widowhood and the money management responsibility that comes with it. Saving for retirement now will put you in a better position to manage your finances if you’re ever on your own.


Even if you’re happily married, divorce is always a possibility, and you won’t necessarily be entitled to your husband’s retirement savings. Depending on the state you live in and the terms of your divorce, you could be left with nothing.

Smaller benefits:

Working less means decreased Social Security and pension benefits as well as an increased likelihood that you won’t have been vested in an employer match. With less of a benefits income, women need to rely more heavily on personal retirement savings.

Even in the best-case scenario where divorce and widowhood are not a concern, it can be greatly beneficial for both partners to save for retirement. You can only save up to a certain threshold in an IRA or 401(k), so when both husband and wife save, that threshold doubles. Having two accounts also diversifies your investments further.

What Should You Do Now?

Now that you know how important it is to save for retirement, you can start making changes right away. The best time to start saving is as soon as possible, and the best amount to start with is as much as possible. Even if you feel like it’s too late or you don’t have enough income, saving just a little now is better than nothing. If you’re still young, saving small amounts now can be even more beneficial than saving large amounts later because of the power of compounding. Examine your budget and you’ll likely find room for retirement savings.

If you’re out of work or your employer doesn’t have a retirement program, you are still eligible to contribute to an IRA. Your husband can open a spousal IRA on your behalf if you don’t have income of your own. If your employer does have a program, enroll as soon as possible and contribute at least enough to get the employer match. Set up automatic contributions as a percentage of your salary, so your savings will increase as your income does. Your advisor can help you select an asset allocation that fits with your risk tolerance, goals and age.

It’s important for women to overcome the barriers that prevent them from saving money. Not saving enough now can lead to severe financial hardship in retirement. No one will ever care about your finances as much as you do, so it’s important to take control of your retirement savings whether you’re married or single, working or staying at home, man or woman.