Women face unique circumstances that influence their ability to achieve long, healthy, and financially secure lives. Over the last half-century, women have made tremendous progress, gaining higher levels of educational attainment and access to career opportunities. However, despite this progress, women continue to be at greater risk than men of not achieving long-term financial security.
This article explores why the gap persists and outlines some steps women can take to plan for a more secure retirement.
Why Women Have a Hard Time Achieving Financial Security
A recent nonprofit Transamerica Center for Retirement Studies (TCRS) survey found that only 18% of women workers say they’re “very confident” in their ability to fully retire with a comfortable lifestyle.1
A major contributing factor is the persistence of the gender pay gap. According to the Bureau of Labor Statistics, in 2023, women full-time workers earned just 83.6 cents per dollar that men earned. Simply put, with lower income, women have less funds available to save for the future.2
Women are also more likely to take time out of the workforce to care for children and/or other family members. Although this caregiving is essential, it often translates to a loss of pay and employer-sponsored benefits. Moreover, when a woman decides to re-enter the workforce, it can be hard to find a job at the same pay level.
Over time, lower income and time out of the workforce can have a dramatic effect. Our survey also shows that Baby Boomer women workers– the generation nearing and entering retirement –have saved an estimated median of just $165k in total household retirement accounts compared with $350k saved by men.1 At the same time, women generally live longer than men, which means that their savings need to last longer in retirement.
Five Steps Women Can Take to Build Long-term Financial Security
While these steps may sound like common sense, they’re not – because many women are not engaging in them.
Note: Men could also benefit from these steps. This article focuses specifically on women.
Step 1: Create a budget with financial goals.
Track your income and spending habits. If you are married or in a domestic partnership, become personally involved in your family finances and investments.
Step 2: Factor employee benefits into your evaluation of employment opportunities.
Review the full compensation package (e.g., retirement, health, and wellness benefits) offered by your prospective employer. Be sure to include employer contributions to retirement plans and health savings accounts (HSAs) in your analysis. Beware that many employers limit such offerings to full-time employees.
Step 3: Start saving for retirement as early as possible.
By starting early and saving consistently, even small amounts can add up over a decades-long working life. If your employer offers a retirement plan, participate and take advantage of any matching contributions.
Step 4: Safeguard your physical and mental health.
A Transamerica Center for Retirement Studies survey found that more than four in 10 women workers (43%) in our survey cite one of their greatest retirement fears to be declining health that requires long-term care.1 Yet only 40% of women workers in our survey report that they are getting routine physicals and recommended health screenings on a consistent basis.1 Although there’s a host of factors that can influence short and long-term health, women could be taking more preventative measures, such as eating healthy, exercising regularly, and seeking preventative care.
Step 5: Anticipate and plan for caregiving and family responsibilities.
Many women provide both hands-on and financial assistance to family members, including parents, children, grandchildren, and relatives with disabilities. When faced with these responsibilities, carefully evaluate any changes to your employment and explore flexible options such as part-time work, remote arrangements, or taking leave, rather than giving up your job altogether. These efforts can help protect your long-term financial security.
