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Women’s Retirement Crisis


Shorter Careers and Reduced Earnings Threaten Women’s Long-Term Goals

 Over the last few decades, women have moved into a position of power when it comes to managing the country’s wealth. Consider the following:

  • Women currently control $14 trillion, which is more than half of the nation’s personal wealth. That amount is expected to climb to $22 trillion in 10 years.1
  • Women influence more than 80% of consumer spending decisions and make 91% of new home purchases.2 And, as caregivers to both children and parents, their spending decisions impact multiple generations.
  • 59% of women have primary responsibility for managing household finances, while 94% share responsibility for financial decisions, investments and retirement planning.3
  • Women represent 58.7% of the workforce as of September 2022, giving them more buying power than ever before.4

Yet, even with this rise in women’s financial empowerment, women are still at a disadvantage when it comes to long-term financial stability and retirement planning. And many in the financial services industry have been slow to recognize and support these savvy female consumers.

In recent years, the financial services industry has shifted from transaction-based interactions to a more holistic planning approach. While this is a positive development for consumers overall, women have been largely left out of the picture, as many financial assumptions and projections are based on a pattern of employment, saving and spending that’s more in line with men. Most software fails to account for the unique challenges women face in planning for retirement, such as:

  • Extended time out of the workforce to care for children and/or aging relatives – On average, women spend 44% of their adult lives out of the workforce, compared to 22% for men.5 Even just a few employment gaps can have a significant impact on a woman’s lifetime earnings.
  • Longer lifespans, resulting in more years lived in retirement – On average, women in the United States live five years longer than men.6 Consider what that means for a woman who is trying to save for retirement. If she intends to live on $80,000 per year, she’ll need access to $400,000 more in retirement savings than an average man.
  • Higher lifetime healthcare expenses – A recent study found that a 65-year-old single man retiring in 2022 can expect to spend an average of $150,000 in healthcare costs over the course of his retirement, while a single woman can expect to pay $165,000.7
  • Lower lifetime earnings – On average, women make $0.82 for every $1 earned by men.8
  • Reduced Social Security benefits – Women’s lower wages and time out of the workforce can reduce their Social Security benefits. In fact, women receive Social Security benefits that are, on average, only 80% of what men receive.9

While the assumptions used in many financial plans are often presented as gender-neutral, they often don’t account for these variables that are unique to women. In addition, financial recommendations are more likely to be guided by male advisors. As of January 2023, 70% of professionals completing the CERTIFIED FINANCIAL PLANNERTM designation were men.10While the percentage of women obtaining the CFP® designation has increased in recent years, women continue to be underrepresented as financial advisors.

While the retirement landscape for women may seem discouraging, there are steps you can take today to improve your chance of success.

  • Establish and follow a custom financial plan – A great way to successfully prepare for retirement is by having a financial plan in place to guide your decision-making. Your custom plan should account for any specific choices you make, such as taking time out of the workforce to care for loved ones. Once you’ve established a financial plan, it’s important to review it on a regular basis to ensure it continues to meet your changing needs as your goals and situation evolve over time.
  • Work with an advisor who understands the challenges you face – Any advisor you choose to work with should be prepared to navigate the specific challenges you face. A cookie-cutter financial plan may be based on assumptions that aren’t applicable to your particular financial situation. Your advisor should take time to get to know you, your current financial situation and any specific circumstances that may impact achieving your future goals.
  • Start saving early and often – While the gender wage gap is gradually shrinking, women still need to start saving and investing earlier than men in order to increase their odds of being successful. By saving early and often, you can take advantage of compounding interest over time, which can be a powerful ally in any investor’s efforts to combat the long-term impact of lower lifetime wages.
  • Plan for extended time out of the workforce – It’s important to plan for time out of the workforce by implementing saving, investing and budgeting strategies to help cover periods of reduced income. Work with a qualified wealth manager who can help you implement a variety of strategies, including an emergency savings account, to help offset time away from work.
  • Plan for healthcare expenses – As a starting point, if you have access to a health savings account (HSA), consider making contributions sooner rather than later. In addition to helping you save for healthcare expenses, HSAs offer three distinct tax advantages:
  • Because contributions are made with pre-tax dollars, they reduce your taxable income
  • HSA funds grow tax-deferred in the account
  • When used to pay for eligible medical expenses, HSA withdrawals are tax-free

Some employers even make matching contributions. HSA contributions made via payroll deduction are not subject to Social Security and Medicare taxes, and there are no required minimum distributions from these accounts, which make them a great way to save for healthcare expenses in retirement.

Feeling overwhelmed? We can help. At Creative Planning, we help women navigate their unique financial challenges on the way to achieving their long-term goals. We focus on providing you with the confidence and security of knowing the actions you take today are setting you up for a sound financial future. For more information, schedule a call with a member of our team.


  1. https://www.newyorklifeinvestments.com/assets/documents/lit/women-and-investing/women-investing-analytical-report.pdf
  2. https://www.bankrate.com/loans/personal-loans/purchasing-power-of-women-statistics/#purchasing
  3. https://hermoney.com/invest/financial-planning/more-than-half-of-women-control-household-finances-investments-and-retirement-planning/
  4. https://fortune.com/2022/09/06/women-workforce-fed-rates-consider-full-employment-katica-roy/
  5. https://www.ally.com/do-it-right/investing/should-women-invest-differently-than-men/
  6. https://www.health.harvard.edu/blog/why-men-often-die-earlier-than-women
  7. https://www.plansponsor.com/health-care-retirement-will-cost-average-315000
  8. https://www.pewresearch.org/fact-tank/2023/03/01/gender-pay-gap-facts
  9. https://www.brookings.edu/essay/how-does-gender-equality-affect-women-in-retirement/
  10. https://www.cfp.net/news/2023/01/cfp-board-exceeds-95000-cfp-professionals

This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.


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