Feeling behind on retirement savings? You're not alone — and it's not too late. Discover the reasons women encounter a larger retirement gap and how to begin closing it today.

This episode is part of our monthly retirement-focused series. With practical tips and insightful discussions, these episodes will equip you with the tools to feel more confident about your financial future. Don’t miss out!

You've likely heard about the gender pay gap, but there's a more silent crisis affecting many women: the retirement gender gap. Whether you've taken a break from work to care for family, are a Gen X woman approaching retirement with insufficient savings, or are newly navigating finances alone after losing a spouse, it's common to feel left behind. The good news is that you can change your trajectory.

Recently, two experts discussed the challenges women face on the path to retirement security, identifying those at greatest risk and, importantly, sharing steps you can take today to close the gap.

UNDERSTANDING THE ROOTS OF THE GAP

The retirement gender gap is complex, stemming from multiple factors. First, there’s the persistent gender pay gap, where women generally earn less than men throughout their careers. Second, women typically live longer, requiring more funds for a longer retirement. Additionally, many women step back from their careers to care for children or aging parents, which can cost them around $300,000 in lost earnings over a lifetime.

IDENTIFYING AT-RISK GROUPS

Some groups face a notably larger retirement gap:

  • Solo agers
  • Gen X women
  • Caregivers

These groups often share a significant lack of financial confidence. Women’s financial empowerment is a recent development; for instance, the Equal Credit Opportunity Act was only enacted in 1974. This lack of confidence can prevent women from investing effectively. Studies indicate that while women may feel less confident in their investment abilities, they outperform men when they do invest.

“Women often feel a real fear about outliving their savings,” notes one expert.

SINGLE WOMEN ON THEIR OWN

Single women, regardless of their circumstances, often encounter unique financial challenges. “Single women bear the entire cost of living without shared expenses,” one expert explains, highlighting their increased risk of poverty. Many are also learning to manage finances alone after losing a spouse.

Nearly half of single women report feeling “very far from where they need to be.” To address this, start with understanding your financial situation, including expected healthcare costs in retirement. The average out-of-pocket healthcare expense for a woman retiring at 65 is $300,000. “This figure may seem overwhelming, but knowledge is power,” the expert adds. “Understanding these expenses allows for better planning.”

GEN X WOMEN IN A CRUCIAL PHASE

Gen X women are at a crucial juncture—close enough to retirement to feel anxious yet still able to make impactful changes. Research shows that only 64% of women feel confident about achieving their desired retirement lifestyle, compared to 68% of their male counterparts.

To build confidence, resist the urge to give up. “It’s possible you haven’t yet obtained the clarity you need,” one expert emphasizes. “Create a solid plan that outlines your current position and future goals.”

CAREGIVERS FACE UNIQUE CHALLENGES

Women in caregiving roles often bear a heavy financial burden. They frequently leave the workforce to care for loved ones, which also carries psychological costs. “This can create a ripple effect on their overall well-being,” says one expert.

Those in this situation should remember they don’t have to manage everything alone. Seeking help from family or exploring caregiver benefits from employers can ease the burden. “Many workplaces now offer resources that can assist,” she adds. “Recognizing you can’t do it all is essential.”

Also, consider the financial implications of caregiving versus working. Hiring help might allow you to remain employed, keeping your seniority and continuing to contribute to retirement savings.

CREATING A ROADMAP TO SUCCESS

No matter where you find yourself, the first step remains the same: create a financial plan. Start simple, perhaps by establishing a budget.

“Understanding your monthly income and expenses is crucial,” one expert advises. “Once you have a clear budget, you gain more control and can identify areas for improvement.”

CONSIDER PROTECTED INCOME

After budgeting, evaluate potential retirement income sources, including protected income, also known as “lifetime income.” This can come from Social Security, pensions, and annuities.

Research indicates that while 75% of women recognize the importance of protected income, only 39% fully understand annuities. In essence, you invest a sum and receive regular payments to cover living expenses.

There are two primary types: fixed annuities (which guarantee a return) and variable annuities (exposing you to market fluctuations for potential growth). “Both types ensure you receive income you can’t outlive,” one expert explains.

This assurance is particularly valuable for women who statistically require their funds to last longer. “Annuities can provide stability, protection against longevity, and peace of mind,” she adds.

TAKE ACTION NOW

Whether you're a caregiver, solo ager, Gen X woman, or simply haven't assessed your retirement savings recently, know that it's not too late.

“It may feel daunting, but the gap is manageable,” an expert states. “Small adjustments or smarter use of resources can lead to significant improvements. The key is taking that initial step.”

Finding the right support is crucial. “Seek a financial professional with the experience and credentials you can trust to guide your financial decisions,” she advises.

Let go of the expectation to have everything figured out from the start. “Many men will confidently take on new challenges without knowing everything,” one expert points out, encouraging women to embrace learning as they go. “You probably know more than you think.”

Learn more: Women, particularly widows, often seek a trusted partner for navigating retirement choices. Here are seven essential tips for finding a financial professional.