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The Challenges of Women in Retirement

Many studies suggest that when it comes to retirement, women are saving less and living longer than their male counterparts. As a result, it’s no surprise to find women have lower confidence facing retirement. The good news is there are plenty of proactive steps you can take as an employer to help the situation.

A 2016 study of retirement preparation by Transamerica found that men feel far more confident about their retirement plans than women, with three in five men “somewhat” or “strongly” agreeing their nest egg is doing well, compared to just 43% of women.1 The same report showed that while nearly two-thirds of men say that saving for retirement is a financial priority for them today, only about half of women agree. The study also revealed that despite having less saved and lower confidence about retirement than their male colleagues, female employees also plan to live longer. Women gave 90 years as the median age they expect to live to—five years longer than the median male response.

If women have on average both more years to live and less to live on, they’ll need to make adjustments during their working years to achieve lasting financial wellness. You probably employ roughly the same number of women as men, and it’s worth asking how well your female workers are doing getting ready for life after their careers.

Here are a couple of stats on women that are especially surprising when considered together: Women comprise about half (50.04%) of the workforce but are also 80% more likely than males to be impoverished once they retire.2,3

One finding from a 2015 study released by the Insured Retirement Institute should come as no surprise: a high majority (80%) of women are concerned about saving enough for retirement, while most agree they are “very concerned.”4

For several reasons, the women in your organization are likely to be lagging behind their male peers in preparing for retirement. To be sure you can help them to have the best shot possible at retiring well, you need to know about the unique challenges they face.

Longer Life Expectancy: A Mixed Blessing


While it’s true that women are more likely to suffer financially in retirement than men, this is partially explained by the fact of their longer life expectancy. In fact, as any generation ages and men drop out, its population skews female, an expectation studies confirm. The National Institute on Retirement (NIRS) reported in 2016 that in addition to facing a higher likelihood of retirement poverty in general, women between the ages of 75 and 79 in particular are three times more likely to have financial hardship.5 This makes sense considering that life expectancy is 77 for American males, but 82 for females.6

But other factors come into play for female retirees:

  • Despite being somewhat more likely than men to work for an employer offering a retirement plan, women have the same overall participation rate as men.7

  • The authors of the NIRS study suggest this gap could be due to two factors: women’s higher rates of part-time employment and shorter average job tenure preventing their eligibility.

  • The median value in women’s defined-contribution retirement plans is a third less than men.8

  • Because of lower lifetime earnings on average, women also see reduced Social Security benefits in retirement.9

  • For various reasons, women may not be as plugged into the family’s finances and retirement planning as men. Sometimes women are not the family’s primary breadwinner, or may shoulder the additional burden of caring for children. When their marital status changes through divorce or widowhood, this can set women back significantly in their retirement plans.

Generational Gaps: Approaching Financial Issues Differently



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The IRI report studying women’s perspectives on retirement planning discovered a few key differences between older and younger women. The former are more likely to:

  • Be in active communication with a financial advisor.10
  • Own multiple financial products.
  • Have knowledge about financial questions.

On the other hand, the IRI also found that younger female employees are more concerned about personal finance than their older colleagues, and are also more willing to talk to friends and coworkers about financial issues.

In the case of younger women on your team, their greater willingness to discuss money at work is a good sign about your organization’s opportunity to provide them with retirement education and great tools to prepare them for the future.

How You Can Support the Women in Your Workforce


What might be holding back the women in your company from taking control of their retirement prospects? Let’s consider a few strategies you can use to help women throughout your organization retire well.

One great way to help them jump into a proactive mindset is to show them that retirement is more about dollars than years. While it’s true that everyone will stop working eventually, it’s both false and dangerous to believe that a financially stable retirement is something that just happens without active planning. Most of your employees, both male and female, are probably in difficult shape financially, and could very much use your help in understanding how to move forward.

Older women are more financially knowledgeable than younger women, but they’re also less willing to dive into those topics with friends or even in the workplace. And despite having more head knowledge, the stats we discussed about most women’s low confidence and lack of retirement savings indicate they still have some learning to do, too. That’s why a financial wellness benefit that allows for privacy and flexible access will be just as appealing for older women as their younger coworkers.

The differences among the generations are also worth bearing in mind as you implement greater financial wellness in your business. Younger women may be less knowledgeable and experienced with financial issues, but they’re also more open to those conversations. Key topics include:

  • Budgeting. Most Americans live paycheck to paycheck, and your employees won’t begin to make headway on retirement until they have some excellent coaching around monthly spending plans.11

  • Debt elimination. One of the problems preventing your employees from budgeting is ongoing consumer debt. Helping them to see the connection between their debt and their inability to invest is one of the keys to preparing them for retirement.

  • Emergency savings. Seven out of 10 Americans have less than $1,000 saved, which means they’re either neglecting or draining any 401(k) plans and squandering any shot at sustained compound growth. Until your workers have enough saved to cover emergencies without borrowing, they’ll never get started on retirement planning.

  • Investing. Failure to address the first three steps makes 401(k) participation, and by extension a healthy future, highly unlikely for your team.

The best financial wellness program will address all of these components while also communicating in a variety of formats, being available on-demand, and featuring content designed to inspire real behavior change.

Related: How are all your employees doing with their retirement planning? Click here to get a full assessment of your company's retirement plan health.

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Ramsey Solutions

About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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