Bridging the Retirement Gap for Women

Retirement planning is rarely straightforward, but women in particular have some unique hurdles. Due to a mix of social, economic, and lifestyle factors, women are often at a disadvantage when it comes to retirement planning compared to men. But here's the good news: while the stats show that retirement planning is a steeper climb for women, by understanding the systematic challenges and by using the right strategies, women can overcome these hurdles and take charge of their retirement goals.

1. The Wage Gap and Compounding Effects Over Time

We’ve all heard about the wage gap. But here’s what that means for retirement: According to a new report from Goldman Sachs, they found that this income gap can create a 24% shortfall in women’s retirement savings over a lifetime. Why? Lower earnings often mean lower contributions and less time for those dollars to compound and grow. It’s a ripple effect, and it adds up fast.

Takeaway: Even if your salary isn’t skyrocketing, take advantage of compounding wherever you can. Consider bumping up retirement contributions or exploring investment options that leverage compound growth. These can help offset the impact of reduced earnings over time. And don’t forget, small, steady contributions can make a huge difference down the road.

2. Caregiving Responsibilities: The Unsung Hero (But Also An Unseen Drain)

Women are more likely than men to leave the workforce or shift to part-time roles to provide care for children, aging parents, or other family members. According to the Goldman Sachs study, 40% of working women reported leaving a job at some point to provide care. And while caregiving is a beautiful thing, it can shrink income, delay career progress, and lower Social Security benefits. Those gaps in income? They affect retirement savings, too.

Takeaway: If caregiving is on your radar, planning ahead can help lighten the load. Start a discussion with family about future financial support, and if possible, work with a financial planner who can help you strategize for both caregiving and saving.

3. Longer Life Expectancy Means More Savings Required

Did you know women tend to live longer than men? While that sounds like a win, it also means that women need more substantial savings to cover healthcare and living expenses for additional years. Living longer means retirement money needs to last longer—often for years beyond what our male counterparts need. In the Goldman Sachs study, retired women were more likely than men to live on less than 70% of their working income, which means those years can feel extra stretched.

Takeaway: A steady, reliable income can be your best friend in those later years. Look into retirement income options that provide guaranteed payouts, like annuities, and consider a personalized financial plan that includes inflation protection to ensure your funds stretch as far as needed.

4. Financial Advice Isn’t Just Helpful—It’s Essential: The Case for Personalized Financial Advice

Interestingly, 95% of women in the Goldman Sachs study reported wanting financial help and prefer working with a financial advisor who can offer holistic, hands-on support. However, many women face a lack of confidence and higher stress levels around managing their retirement savings, which can deter them from reaching out for help. Women are twice as likely as men to say they don’t feel they have “enough” saved to work with a financial advisor. Yet those who do get professional guidance report feeling more confident, which means they’re one step closer to the retirement they want.

Takeaway: If you feel lost, know that you’re not alone—and that getting professional advice is one of the best ways to boost confidence. An advisor can help you map out a game plan for saving, investing, and budgeting for retirement so you can feel secure in your choices. Don’t let stress prevent you from achieving your goals. Working with a trusted advisor can not only help you make informed decisions but also give you the confidence to pursue your vision for retirement.

Taking Charge of Your Retirement Future

The obstacles are real, but with the right strategy, you can tackle them. If you’re feeling the weight of these challenges, let’s talk. Together, we can create a personalized plan to make sure your retirement savings are on track and ready to work for you. Schedule a chat today (jennifer.jenkins@bluestonewp.com), and let’s get you on the road to a retirement that’s just as bright as you deserve!

References:

Goldman Sachs Asset Management, “Retirement Survey & Insights Report: Challenges Women Face Saving for Retirement,” 2024