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Thinking about retirement isn’t always very fun. It doesn’t matter if you’re starting your first job or planning your long-overdue retirement party, very few people enjoy putting money aside for later when they could enjoy it today. Before you put off retirement planning or think it’ll just take care of itself, take a look at these statistics:

Saving for retirement is vital for your financial future. For women, accumulating enough money for their golden years can be even more challenging. They have lower average incomes than men, and they’re more likely to take family leave during their careers. They also they tend to take fewer investment risks. Given these factors, women generally end up saving less money for retirement than men do.

Women tend to have higher expenses during retirement because they live longer, on average, so in theory, they should have more than men. Below, we look at why women have historically saved less for retirement and tips to increase your retirement savings, regardless of gender.

Why Do Women Have Less in Retirement Savings?

Lower Risk Tolerance

The National Institute on Retirement Security suggests women may be more risk averse than men, which means women tend to be less likely than men to invest in riskier investment opportunities that can provide a higher return. So on average, they would prefer to put their money in a safer investment even if it means earning less money in the long run.


Ilene Davis, a certified financial planner at Financial Independence Services, agrees that women may accumulate less wealth over time because they tend to be less aggressive than men when it comes to investing. She has met many women who prefer certificates of deposit (CDs) rather than stocks. This is because CDs tend to be straightforward, easy to manage and relatively safer than stocks.

One of the most important aspects of investing is the rate of return you receive on investments. Many of Davis’ female clients save similar amounts of money as men, but women tend to pick investments with lower rates of return, so they don’t accumulate as much wealth over time.

Fewer Working Years

While family dynamics are changing, historically there have been higher percentages of women staying at home than men. Women are more likely to leave the workforce to take care of aging family members or children. This gives them fewer years to make money but also fewer years to benefit from employer retirement programs and to receive pay raises.

Gender Pay Gap

Women make an average of 79 cents for every dollar men make, leading to lower lifetime earnings. This can’t completely explain why women tend to have lower savings for retirement, but it may play a part, particularly in the way income influences Social Security benefits and pensions.

Social Security benefits are doled out based on the amount of taxes you paid while you were working, and the lower your income, the lower your tax bracket was. The less you paid into Social Security, the less money you’ll be eligible for.

Pensions are typically based on income and how long you worked for your employer, so with lower income comes a smaller pension. Women are more likely to leave the workforce to become caregivers for family, which may lead to a lower pension or make them ineligible for pensions in general.

With employee retirement contribution plans, many matches are based on percentages. Employers will match a certain percentage of your income up to a certain amount. So if they match 3% of $50,000, you receive an additional $1,500 in retirement money when you invest $1,500 of your own. Thus, $3,000 is accumulated. If you make $55,000, you’ll receive $1,650 from your employer when you put in $1,650, for a total of $3,300. Not only will a higher income yield a higher employer match, it will also incentivize individuals to save more. Over time, those with higher incomes have the potential to accumulate more. Regardless of gender, lower salaries lead to lower employer matches if the employer uses percentages of income as its guide.

Studies Suggest Women Save More Than Men

According to a study by The Vanguard Group, women were more likely to participate in employee contribution plans than men across all income levels. They found 72% of women earning $30,000 to $49,999 participated in an employee contribution plan, while only 59% of men participated. Women contribute 6% to 12% more to their retirement than men at every income level as well.

However, men had both average and medium balances higher than women’s. Men had an average of $115,835 in their retirement account while women had an average of $75,771. The average women may be saving more and taking their employer up on their contribution, but they are not accumulating wealth as fast as men.

Where Do I Begin?

Prioritize Goals

It’s understandable that you might feel uncomfortable taking charge of your retirement fund or wonder where to begin. The first step is prioritizing your current and future goals. Determine when you want to retire and what you want to do during retirement, and then estimate how much you’ll need.

If you’d rather stay home with the grandkids, you may need less money than if you want to travel the world. If you know you want to retire early, you may need more in savings. Once you determine what you want out of that time in your life, you can determine how much you need to save.

Educate Yourself

Learn about any retirement plans offered by your employer and determine if they offer a matching contribution. Typically employers will offer a few options, including tax-deferred or Roth accounts, where you pay taxes up front so you don’t have to pay taxes when you make a withdrawal. Determine which is best for your situation and sign up for automated savings.

Once you have an account, you need to understand why you should save and how much as well as what investments you should make. Davis suggests that another reason why older women may not have accumulated as much wealth is due to a lack of financial education. Many people don’t learn about compounding interest, which helps to explain how you can make money off the money you’ve saved, or inflation, which explains, in part, why you need so much money during retirement.

It’s hard to make an informed decision if you don’t understand something, so it’s important to seek out the information you need.

Take an Active Role

Historically, women have let men take charge of the family finances. While this may not be as accurate today, some women still take a back seat. Educating yourself is the first step for both women and men who want to take an active role in their finances.

Start Early

Saving for retirement early in your career is essential. The earlier you start, the more time your money has to grow. Even if you don’t plan to retire for another 40 years, the more time you give yourself, the more time interest has to accumulate. If you give yourself enough time, you may end up making more in interest than you end up investing.

If your employer has a retirement match, make sure you’re taking advantage of it. Not taking the match is like leaving free money on the table, and no one in their right mind would do that!

Start Slow

Saving for retirement is a marathon, not a sprint. Experts typically suggest saving 10% – 15% of your salary, but don’t worry too much if you can’t save that much in the beginning. Find ways to save a little each week, and work your way up.

Bringing your lunch to work a few days a week or purchasing used items instead of new can save you enough money to get started. Once you’re comfortable, you can begin to save even more. Fifty dollars here and there adds up to thousands in the long run.

Having a lower income does not mean you can’t start saving or that you’ll never save enough. Starting later in life also doesn’t mean you’ll never have enough for retirement. No matter what your income is or when you begin saving, save whatever amount you can now. As Davis says, “It’s not the amount of income, it’s the percentage of income you save and the way you invest it.”

Are you actively saving for retirement? We’d love to hear your tips on saving for the golden years. Remember to subscribe to the Zing blog for more tips on retirement, finance, home and lifestyle.

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