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Why Women Need to Close the Retirement Savings Gap

Women are more likely than men to feel they are behind in planning for retirement. Here’s a look at some of the reasons why, and how you can boost your savings confidence.



  • Women enjoy a greater average life expectancy, meaning their retirement incomes will have to last longer.
  • Women educators earn nearly 7% less than college-educated women in other fields so they may have to save more out of every paycheck.*
  • Women must guard against being too conservative in their investing approach, which could lower long-term returns.


Longer life expectancy requires more savings

Women can expect to live about five years longer than men, according to the Institute for Health Metrics and Evaluation. That’s the good news. The (potentially) bad news is the longer you live, the longer your retirement income has to last. Higher healthcare and lifestyle expenses as you age may put further strains on a fixed income stream.

Pension benefits and Social Security may not be enough to maintain your lifestyle throughout a 20- to 30-year-long retirement. To give yourself more flexibility, focus on saving more in your personal retirement plans, such as a 403(b) plan and other outside savings and investment options.

Lower pay requires higher contribution rates in personal savings plan

There is still a gender wage gap in America. The precise percentage differential is in dispute depending on how you crunch the numbers, but there’s no denying that women are paid less than men in most comparable job positions. Even in a female-dominated segment like elementary and middle school teachers, women earn about seven percent less than men, according to a 2011 study by the Economic Policy Institute.* So even though women contribute about the same percentage of wages to savings plans as men, their lower overall salaries may keep them at a “dollars-saved” disadvantage.

In addition to the equal pay issue, women are more likely to work part time or have pay gaps due to family caretaking responsibilities that may require them to take off from work. This need to nurture may cause women to think of the money they’ve saved as a family resource, rather than something for personal financial security in retirement. It can also reduce pension and retirement benefits due to fewer cumulative years in the workforce.

To help make up for lower salaries, women should consider putting a greater percentage of their earnings into personal savings plans such as a 403(b) plan. And while helping family members is always noble, try to keep your own retirement savings separate from money budgeted for family needs.

Achieving higher investment returns requires taking on more risk

Conventional wisdom suggests that women are more risk-averse than men. Some recent studies tend to dispel this notion by showing that women have roughly the same percentage invested in stocks (a good indication of risk level) in their retirement plans as do men.

The willingness to take on more risk in an effort to increase the potential for higher long-term investment returns may simply be a personal, rather than a gender trait. But if you feel like you’re lacking the confidence necessary to make your own investment decisions, take the time to actively educate yourself on investing basics and risk management strategies. The more you know, the easier it will be for you to manage your risk/return goals.

The bottom line

To increase your retirement income security, try to:

  • Augment pension benefits and Social Security by contributing to a 403(b) plan and other personal savings options to give yourself a better chance of not outliving your money.
  • Regularly increase the percentage of your pay you contribute to your 403(b) plan to help make up for lower salaries and fewer overall working years.
  • Learn more about investing and risk management strategies so you can maximize your savings growth potential and still be able to sleep at night.

*Economic Policy Institute, Issue Brief #298, March 30, 2011.

Plan your strategy:


Educator pensions and Social Security might come up short. Find out why your benefits may fall short and what you can do about it.


Working with a financial planner. Read tips on how to find and evaluate a financial advisor.


Why women need to close the retirement savings gap. This article offers ways you can become a more confident saver and investor.


Savings options beyond your 403(b) plan. Explore a variety of options beyond your 403(b) that may help you achieve different goals.

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