How to Fight the Retirement Gender Gap

Because women's salaries still haven’t caught up to men's, the wage gap often means women have less saved for retirement. But there are steps they can take to ensure their savings provide enough income in retirement.

When it comes to having enough retirement income, women have a distinct disadvantage, beginning with wages that continue to lag their male counterparts. Despite improvements, women still make just 80 cents for every dollar men make doing the same work, according to the U.S. Census Bureau.

And, of course, that pay gap could stretch well into retirement, according to Prudential research (opens in new tab), which found that with lower salaries, women receive less in Social Security benefits and accumulate 32% less in retirement savings than men. Worse, nearly half of women say they have no retirement savings at all.

At the same time, women also carry more debt. Student debt is particularly troubling for women, who are more likely than men (opens in new tab) to graduate with excessive debt levels that are 10% or more of their gross monthly income, according to Prudential’s 2019 Closing the Retirement Income Gender Gap report. And more than half of women report other types of non-mortgage debt as well.

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The fact that U.S. Census statistics (opens in new tab) show women live longer than men, on average, means they actually need more income in retirement and need to be better prepared to secure financial wellness throughout their lives. As a result, it’s less surprising, then, that women are 80% more likely than men to be impoverished after they reach the age of 65, according to the National Institute on Retirement Security (opens in new tab).

So, ladies, if you haven’t done so already, now is the time to save for retirement and have a plan to generate income after you stop working — whether you’re starting a career or winding down. Here are some steps you can take:

Pay yourself first

Women tend to save money after their expenses and debt are taken care of. They put off saving for their future selves while paying off mortgages, credit card and student loan debt, or saving for college for their children. And, of course, women tend to take care of family first, spending 28 hours a week on parenting or caregiving duties — 65% more than the average for men, according to 2016 statistics from the Organisation for Economic Cooperation and Development. But that doesn’t have to mean putting yourself last. Taking care of your own needs is a critical part of financial wellness, for you and for your family.

Work with a financial professional

More than half of women don’t work with a financial professional, either because they don’t believe they can afford it, or because they don’t think they have enough resources to warrant a professional’s help. A financial professional can help you develop a tax-efficient plan and help you maximize your Social Security claiming options. You can also get help in how to prioritize savings while paying off debt and managing day-to-day expenses.

Set an income goal as part of an overall financial plan

Track savings in terms of how much you want to get paid in retirement in line with your financial plan, targeting a realistic retirement age and considering expenses you may have over 20 or 30 years. Estimate your life expectancy — and aim high — then use a retirement calculator to help you estimate a reasonable retirement paycheck. And create a firm strategy, rather than speculating about what you might need or want.

Consider how long you may need to work

Parenting duties have traditionally affected women’s time disproportionately. We know that women work outside the home nearly as much as men and, on top of that, spend another 28 hours per week on unpaid work at home. Absence from the workplace for having children or even tending to other family members’ needs can create a career time gap that many women may need to make up for.

Working longer can help you build a more robust income stream in retirement and help you save money on health expenses by stretching out the time that you’re covered by an employer-based health insurance. If it fits your goals, putting off tapping into Social Security as long as you can — up until age 70, when your benefit has grown as much as it can through delayed retirement credits — helps you get the highest payment possible as part of your monthly income.

Coordinate retirement benefits

Married couples have a great opportunity to evaluate two benefits packages, including considering deductibles and copayments for health insurance, as examples. By coordinating benefits, couples can get the coverage they need, minimize costs and lessen tax implications.

Consider life insurance

Many folks don’t think they need it, if they consider it at all. Most people may not realize that life insurance can provide benefits well beyond paying for funeral expenses. You’ll want to consider life insurance if someone depends on your income for any number of reasons. That, of course, includes providing for children, but you could also use it to ensure your debts are paid or that loved ones receive the care they need. In fact, it’s a versatile financial tool that can help build financial wellness now and for the future.

Consider insuring retirement income

Using a product like an annuity can help protect your retirement savings. The goal of an annuity is to provide a steady stream of income during retirement. You pay a lump sum (or series of payments) to an insurance company, which in turn pays you a regular disbursement for the duration of the annuity. It helps you to be thoughtful with how and when you tap into your retirement savings to ensure you can make it last as long as you need it to.

Reassess as you go

It’s a good idea to think in terms of income when deciding how much you need to have saved. How much might you need, and for how long? Expect to assess how you’re doing each year and change how you spend money as often as you need to once you’re retired.

Despite challenges, women can take steps now to avoid falling further behind in the gender pay gap — with each step making a promise to your future self that could give you and your loved ones peace of mind that your financial future is secure.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Salene Hitchcock-Gear, President of Prudential Individual Life Insurance
President of Prudential Individual Life Insurance, Prudential Financial

Salene Hitchcock-Gear (opens in new tab) is president of Prudential Individual Life Insurance. She represents Prudential as a director on the Women Presidents’ Organization Advisory Board and also serves on the board of trustees of the American College of Financial Services. In addition, Hitchcock-Gear has a bachelor’s degree from the University of Michigan, a Juris Doctor degree from New York University School of Law, as well as FINRA Series 7 and 24 securities licenses. She is a member of the New York State Bar Association.