Four Actions to Lessen Retirement Stress for Women (and Men)

An older woman smiles as she looks at her phone outside a storefront.

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By Nicole Stokes, CLTC®, CLU®, ChFC®, M.A., RICP®

published 9 December 2024

Women face many unique retirement challenges — longer lifespans, gaps in savings years and higher health care costs — and this is reflected in how they feel about their retirement preparedness. According to Northwestern Mutual’s 2024 Planning & Progress Study, women have high levels of financial uncertainty — only 36% know how much they’ll need to retire comfortably.

However, our study also found the youngest generation of working women is setting ambitious financial goals, and their rising incomes could provide the financial fuel they need to reach their retirement targets. Gen Z women also feel the most confident about their money, with 60% saying they’ll be financially prepared for retirement compared to just 40% of Gen X women. This generation of women in their 40s and 50s believe they’ll need more than $2 million to retire comfortably — the highest amount reported by any generation and $500,000 more than the average American woman.

Despite the differences, there are proven ways for all generations of women to protect what they’ve already built, save for tomorrow’s retirement dreams and still enjoy their current lives. Four actions can help enable all women (and men) to channel their anxiety into empowered financial futures.

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1. Set specific goals

Women often face significant gaps in their earning years, retirement contributions and savings, frequently due to family responsibilities. In addition, their health care costs tend to be higher, which can be financially draining, especially if they are also trying to save for retirement.

Women need personalized plans that address their distinctive financial goals. A good place to start is by understanding what they want to achieve on their journeys. They should jot down short-term goals (one to three years), intermediate goals (three to five years) and long-term goals (five to 10 years). These goals might include reducing credit card debt, creating an emergency fund, saving for a kid’s college education and planning for retirement. These will be important for retirement planning discussions with an experienced financial adviser who understands their financial needs and personal situation.

2. Avoid unconscious spending

Women and men alike should consider adopting a “say no, so you can say yes” approach to budgeting. That means only spending money on what matters and avoiding shopping for items they never intended to buy. This year, the term “loud budgeting” gained traction on social media, and I’ve begun to say no to spending money that I hadn’t budgeted for, such as having an impromptu brunch with my friends on the weekend, or going out for drinks and dinner instead of cooking at home.

This budgeting approach isn’t about cutting spending but about prioritizing what’s most important: our financial future. Saying no can be challenging for women, as many of us have traditionally put others’ needs and wants before our own, but it’s a vital step to take to be financially ready down the road.

3. Maximize your retirement income

Women on average live longer than men. In fact, according to Retirement Researcher, the average woman in the U.S. who reaches age 65 (a typical retirement age) can expect to live an additional 20 years. This means women need to save more over their lifetimes to ensure they don’t outlive their retirement savings. Of course, exactly how much women will need in retirement depends on their lifestyle and expenses.

Women need to think about how to maximize their retirement income, including deciding when to start taking Social Security. Delaying Social Security payments can help increase retirement income. Even though benefits can be claimed as early as age 62, claiming it before full retirement age can reduce a woman’s benefits by as much as 30%. Knowing how much to save, what retirement income options are and how to draw from income sources tax-efficiently are key elements of a maximized retirement plan.

4. Protect your income

Women can be vulnerable to unforeseen events in life, such as disability, illness or the unexpected loss of a spouse. A common blind spot that is easily overlooked, especially when women are young, is the possibility that something could happen that would prevent them from working. To help protect against this, many employers offer short- and long-term disability insurance to their employees, allowing them to still draw an income. A financial plan with a strong foundation in risk management can ensure women are protected against personal risk.

A trusted financial adviser who understands women’s priorities and goals and who can help reveal their blind spots and opportunities can enable them to achieve financial certainty in the near term and financial security when they need it in retirement.

It’s never too late for women to gain the confidence they need to be financially prepared for their life’s journey. By acting today, women can reduce their anxiety and financial uncertainty, and empower their tomorrows.

Disclaimer

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.

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With 15 years of industry experience, Nicole brings an energetic and supportive approach to helping her clients’ financial dreams come true. During her career at Northwestern Mutual, Nicole has been elevated to the Managing Director position and currently serves on the board of the Managing Director Association. As a thought leader, she has contributed to many publications, such as The Skimm, Pregnancy Magazine, Marie Claire and local business journals.