The retirement gender gap is real. Here’s how women can prepare for it.

Why do women often end up with less retirement savings than men?

While women have made great strides in the workplace, they still only earn an average of $0.81 for every dollar men earn.¹ This gap not only makes a difference from one paycheck to the next, but also in the long-term. That’s because you have to contribute more of your paycheck to your retirement account than your male peers just to reach the same savings goal—something that can be tough to do with all your other financial priorities.

It also affects Social Security, another key source of retirement income for many women. Lower wages mean less Social Security income when you retire. Adding to the potential shortfall, 60% of women say they’ve fallen behind on saving for retirement, compared with 42% of men.² If this sounds familiar, here are some potential causes of your financial stress and ways to address them. 

Caregiving costs more than time and energy

Aside from the financial gender gaps, many women also have to balance work with unpaid caregiving. In fact, of the roughly 63 million caregivers in the U.S., 61% are female.³ Being a caregiver often involves stepping away from work for a period of time, reducing hours, or taking on fewer responsibilities.

If you’re in this position, it may be worth asking your employer about flexible working options, benefits, or employee assistance programs. You could also speak with a financial professional about how a temporary change in income could affect your long-term savings, and whether you could keep contributing, even at a lower amount, while your caregiving demands are higher.

The hidden cost of maternity leave

While more fathers are taking parental leave, mothers are still far more likely to take unpaid leave⁴ and tend to be away from work much longer after a child is born.⁵ If you’re planning to take leave or are returning from it, consider checking how this may affect your workplace retirement plan. You should also consider whether you can continue contributing while you’re away and how you'll catch up when you return. Any small steps you take today can add up over time.

What can you do to catch up on savings after a career break?

Talking to a financial professional is one way to start. They can help you spot where you may be able to increase your savings and make the most of your retirement plan at work, including any employer matching contributions.

If you feel more comfortable taking things into your own hands, you could focus on building an emergency fund, paying off high-interest debt, and setting up regular automatic contributions to your retirement account, even if it’s a small amount. Once these habits are in place, you can easily increase the amounts when your income goes up or your expenses go down.

Starting small goes a long way

Women’s retirement outcomes often reflect a lifetime of small financial setbacks that accumulate and then go unnoticed until it’s too late. The good news is that now you know about them, and you can take the necessary steps to better prepare.

You can start small, even by reviewing your workplace plan and checking whether you’re getting the full employer match, or by increasing your contributions when possible. You may also have access to planning tools through your retirement account that you can use to estimate how much money you may need and set a clear goal to work toward. And remember, talking to a financial professional can help personalize the support you receive when putting your financial plan together. 

Your future matters

You don’t have to solve everything at once, nor should you end up with less because you’ve spent your life doing more. Whether you’re building your career, caring for your family, starting over, catching up, or simply trying to find time to plan for your future in a busy life, always remember that your future matters. The sooner you start planning or asking for support, the more control you’ll have over creating a future that feels more secure and more your own.