Saving for retirement is not an overnight project. It takes years of strategic planning to build a nest egg that can sustain you through the end of your life.
In fact, Americans believe they’ll need nearly $1.5 million to retire comfortably in 2024, according to a study from Northwestern Mutual. That’s a 53% increase from 2020, when Americans believed they’d need $951,000 to retire comfortably.
This sharp increase is concerning, but data shows women face additional challenges when building their nest eggs. Prudential’s 2024 Pulse of the American Retiree Survey found that women only have roughly one-third the amount saved as men (a median of $50K vs. $157K). The data also shows women are three times as likely to delay retirement due to caregiving duties.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But it’s not all bad news. There are steps women can take to boost their retirement savings, helping them reach their retirement goals.
No 401(k)? One alternative to consider
Many women report not having access to an employer-sponsored retirement plan. This could be partly due to the amount of time women spend at work. According to the Department of Labor, women are more likely to work part-time jobs, which often don’t come with access to retirement savings plans. Gender roles also come into play with women being more likely to take time off work to care for family. As a result, they’re working fewer years and contributing less to retirement savings. When it comes to employer-sponsored retirement plans such as a 401(k), the Department of Labor found only 43.5% of working-age women participated in a retirement plan.
While contributing to an employer-sponsored retirement plan is helpful due to matching contributions, it’s not a requirement to build retirement savings. Opening a Roth IRA is a great alternative. These accounts offer tax-free growth and tax-free withdrawals in retirement.
With investing, an early start helps
Another crucial step in maximizing your retirement savings is investing. When it comes to investing, time is your best friend. A report from Fidelity Investments found 7 in 10 women wish they would have started investing their extra savings earlier. Investing early on gives your money more time to grow, thanks to factors like compound interest.
Plus, investing at a younger age allows you to take more risk. Historically speaking, women tend to take a more conservative approach with their investments. A report from Wells Fargo found 76% of men believe the stock market is a good place to invest, compared with just 72% of women. Some of this lag could be due to women’s knowledge and risk tolerance when making investments. According to Fidelity, 70% of women respondents said they need to know more about picking individual stocks and 65% say they’d be more likely to invest if they had clear steps to follow.
Investing can be overwhelming, but you don’t have to have a high risk tolerance to see a good rate of return. The same report from Fidelity found women outperformed men in their investments by 40 basis points or 0.4%. If you’re feeling uneasy about investing, consider meeting with a financial adviser. They can help you build a diverse investment portfolio that aligns with your financial goals.
Don’t forget about health care
Outlining your long-term care plans is another component of your retirement plan. Medical care can become extremely expensive over time, especially if you require in-home care or need to be moved to a nursing home or assisted living facility. Women also have a longer life expectancy compared with men, which can exacerbate costs. According to the CDC, the average life expectancy for men is 74.8 years old. For women, it’s 80.2 years old.
Purchasing long-term care insurance can help offset these costs, mitigating the fear of outliving retirement savings.
Make learning about finances a lifelong priority
Financial literacy is another key component to creating and preserving your wealth. Attending financial seminars, reading up on financial news and following changes in federal supplemental programs such as Social Security and Medicare can help you financially prepare for the future. Learning about various money management strategies and how to apply them to your financial situation can help you maximize your savings, providing you with a nice financial cushion in retirement.
In addition to staying educated, meeting with a financial adviser can also be a huge help. They can answer any questions you may have and suggest solutions that fit your needs.
The bottom line: There’s hope for women
Saving for retirement requires a lot of planning. It can be difficult to plan for the unknown. However, contributing to a retirement account, whether that be a 401(k), Roth IRA or both, is a great first step. Even if you’re only able to make small contributions, you’ll be surprised at how these funds grow over time.
From there, begin researching various investments you’d like to make. If you have any questions or concerns, consult with a financial expert. As you’re planning your retirement, don’t neglect your long-term health care plan. Purchasing long-term care insurance can help supplement certain medical costs, which can preserve your savings and lessen the burden on your loved ones as you age. And remember, knowledge is power. Continue your journey to financial literacy. Not only will it teach you money management skills, it will also help you feel more confident about your financial situation.
Related Content
- Tips to Help Single Women Struggling to Save for Retirement
- What Every Woman Needs to Know Before Retiring
- Six Ways Women Can Overcome Any Financial Obstacles Holding Them Back
- How to Choose Your Power of Attorney When You’re Remarried
- Long-Term Care Insurance: To Buy or Not to Buy?
-
The Economy on a Knife's EdgeThe Letter GDP is growing, but employers have all but stopped hiring as they watch how the trade war plays out.
-
Why the Ultra-Rich Still Lose Sleep Over MoneyA look inside the lesser-known financial anxieties of ultra-high-net-worth individuals — and what those fears reveal about markets, policy, and wealth strategy.
-
Financial Fact vs Fiction: The Truth About Social Security Entitlement (and Reverse Mortgages' Bad Rap)Despite the 'entitlement' moniker, Social Security and Medicare are both benefits that workers earn. And reverse mortgages can be a strategic tool for certain people. Plus, we're setting the record straight on three other myths.
-
The End of 2%? An Investment Adviser's Case for Why the Fed Should Raise Its Inflation TargetYes, inflation can be tough on those living on fixed incomes, but protecting us from it too strictly could do our overall economy more harm than good.
-
Medicare Open Enrollment: Why You Need to Pay Extra Attention to Part D, From a Financial AdviserThe lowest premium for prescription drug coverage might not actually save you the most money. Make sure you take copays into consideration and do the math.
-
How the One Big Beautiful Bill Will Change Charitable GivingTaxpayers who don't itemize will be able to take a bigger deduction for donations, which could boost giving. However, high-income donors could see their tax benefits reduced.
-
A 'Fast, Fair and Friendly' Fail: Farmers Irks Customers With Its Handling of a Data BreachFarmers Insurance is facing negative attention and lawsuits because of a three-month delay in notifying 1.1 million policyholders about a data breach. Here's what you can do if you're affected.
-
Serving the HNW Market: How Financial Advisers Can Break Through and Deliver Lasting ValueFinancial advisers have a significant opportunity to serve high-net-worth clients by elevating their capabilities, delivering comprehensive planning, building diverse teams and prioritizing family wealth education.
-
Don't Just Sell, Connect: How Financial Advisers Can Ignite Their Sales GrowthAvoid complacency and embrace small, consistent improvements to optimize your sales process and results.
-
Are You a Small Business Owner Buckling Under Economic Pressure? Here's How You Can CopeSignificant emotional and financial challenges, including tariff worries, are piling up on small business leaders. Here's how leaders can develop more healthy coping strategies and systems of support.
