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Save It Up
Do Women Need To Save More Than Men For Retirement?
The Feminist Financier

I have been thrilled to read recent reports that millennials are out-saving other generations. On average, we save 19 percent of our income, which is 5 percent more than Gen Xers and Baby Boomers, who average only 14 percent.

Many of us focus on saving for near-term objectives, like housing or to live a certain lifestyle. It is equally important that we save for retirement. Investing small amounts regularly can build tremendous wealth, due to the amazing power of compound interest. But, does your gender matter in your retirement planning?

I’m disappointed to say it does; the data suggests women need to save more than men. We face a retirement gender gap. The first reason is a positive one; women tend to live longer. This is the case without a single exception, in all countries. Because of this difference, we need more money to sustain our longer lives.

The other reasons contributing to the retirement gap are frustrating. Women face a persistent wage gap over the length of our careers and spend more time out of the workforce than men. On average, we need to save $1.25 for every $1 saved by men.

A recent article in the Journal of Accountancy addressed this topic and highlighted the health care penalty that women face:

“With longer lives, women also have more years of health care to pay for. According to HealthView Services, a company that publishes healthcare cost research for financial advisers, a healthy 55-year old woman can expect to spend $79,000 more on health care in retirement than a man of the same age. And women are much more likely to need long-term care, too... It's no coincidence that over 70 percent of the residents in nursing homes are women.”

The article also noted that per statistics for heterosexual couples, "men tend to go first, and it's their wives who had to take care of them.”

The retirement gap that exists between men and women may be frustrating, but it is important to understand this now, in our working years, so we can take action. Here are some practical steps that you can take to address your personal retirement gap:

  • Redirect money from less important budget categories. Look out for the sneaky ways we spend more than we mean to. These small expenses can add up; reducing them creates wiggle room for more saving.
  • Increase your retirement savings. If you have a 401(k) at work, you can invest up to $18,000 tax-free. Your employer may match a portion of that, which is like free money.
  • Start talking more frequently about money with the women in your life, because knowledge is power. A Fidelity study found that 92 percent of women want to learn more about financial planning, but eight in 10 “confess they have refrained at some point from talking about their finances with those they are close to.” Women report that talking about money is “too personal.”
  • Encourage other women to save for retirement. Be the woman at work that encourages HR to host retirement savings webinars with your 401(k) provider and talks openly about how excited you are to increase your 401(k) contributions. Your positive, non-judgemental approach will inspire others.
  • Grow your income. This may not happen overnight, but it is the surest path to close your personal retirement and wage gap. At a minimum, you should ensure HR has verified that there is no wage gap between you and your male peers. But I know you can do even more than that to build your wealth.

While data tells us we need to save more than men, I’m hopeful that our generation will be able to apply our tendency to save towards retirement investing. I’ve never met a retiree that regretted saving too much for their future. Let’s start building future wealth now, so we can live our golden years in style like our favorite "Golden Girls."


The Feminist Financier is on a mission to help women build wealth and own their financial independence, by improving financial literacy and taking the mystery out of money. Ms. Financier is also a shoe addict, travel fanatic, and wine enthusiast.


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