Retirement planning for women and their differences from men

Feb 13, 2024

Financial planning

Retirement planning for women
Retirement planning for women

Some women in the baby boomers generation have come into hard times during their retirement years—especially after losing a spouse—wishing they saved more and paid better attention to their finances when they were younger. So, how can younger women in the Gen X, Y, and Z generations avoid similar pitfalls?

 

Let’s explore a few reasons why women today may need more retirement planning than men for a financially stress-free future.


Unique characteristics women have in retirement planning

 

Why might women need more retirement planning than men? Here are a few reasons to consider:


Longer life expectancy: Women have had longer life expectancies than men for decades and this still holds true today. In fact, the CDC reports that women are expected to live close to six years longer than men. Roughly 25 percent of adults aged 65 today are also expected to live past 90 and 10 percent beyond age 95.


Gender wage gap: Unfortunately, most women are still earning less than men. The gender wage gap has barely made any progress in the last two decades. According to Pew Research Center, women earned 82 cents for every dollar men earned in 2022 vs 80 cents to the dollar in 2002.


The World Economic Forum estimates it will take 100 more years for the gender wage gap to close. With women earning less than men throughout our lifetimes, that also means lower Social Security benefits for women.



More conservative investments lead to lower growth: Studies show that women are often more conservative in their investment styles, which can translate to less growth. So it can take more time and saving for women to reach the same target dollar amount for retirement than men. Many women also have a tendency to hold more cash and are less willing to take on added risk for the chance at greater returns. Add on the busyness of juggling work and family and a lot of women simply chose not to prioritize investing (Source: Merrill Lynch).


Fewer working years: Women tend to have fewer working years in their careers than men if they choose to have  / raise kids. The longer you stop working, the harder it is to reenter, especially in this era of rapidly changing tech. Men also tend to work more hours per week than women (Source: Bureau of Labor Statistics, 2023).


Studies by UBS also report that 80-85% of women are involved with short-term finances such as day-to-day expenses and paying bills. But 58% defer long-term financial decisions to their spouses. Amongst the rest, 23% of women take the lead and 19% share decisions equally.


What’s also interesting is UBS found that 74% of women expect ESG (environmental, social and governance) investing to have similar or better returns than traditional investing. But only 47% of women actually hold these types of investments. You can learn more about values-based investing and environmentally conscious investing on our blog.



Simple steps women can take to own your futures


Here are several simple steps to help ensure your future and retirement is secure.

 

  • Max out your 401(k) plan. It’s never too late to start participating in your employer’s 401(k) retirement plan. If your employee benefits include a company match, take full advantage of it every year. In 2024, you can contribute up to $23,000 in a 401(k) plan. If you are unable to contribute the annual limit yet, do your best to at least maximize your company’s match.

 

  • Open an individual retirement account (IRA). You can also choose to open a traditional or Roth IRA account. IRAs are a highly common way to continue growing your retirement savings. They’re easy to set up and fund with Plenty. The contribution limit in 2024 is $7,000 for those aged 49 and under and $8,000 for people 50 and over.

 

  • Get help with your investment portfolio. Do you feel stuck because you don’t know how to get started with investing? Or perhaps you’re sitting on a lot of cash because you’re afraid of losing money? In this day and age, doing nothing means you’re losing money because of inflation. Working with an RIA is a great way to get help with investing and finding a comfortable portfolio that matches your time horizon and financial goals (like Plenty).



  • Keep skills sharp and your resume fresh. Taking time to care for a child or a family member can be a fulfilling opportunity. Keeping skills fresh through part-time work, consulting, and/or ongoing education are increasingly common. Staying in touch with old coworkers and competitors so that when the time comes to return to work, you’ll have an easier time doing so. 

  

  • Take an active interest in personal finance. What’s great about personal finance though is that a little knowledge can go a long way. Check out the Plenty blog for lots of helpful articles on finance fundamentals that are easy to understand. Chatting through an article with a friend is also a great way to make it less intimidating. You might just get hooked talking about finance and even have fun. 


  • Plan for long-term care

before you need it. Healthcare is one of the biggest expenses retirees face and costs are rising. Even if you have health insurance, it may not include long-term care coverage. So it could be worthwhile to purchase a separate long-term care policy as you approach your 50s. According to the American Association for LTC Insurance, the average cost of LTC insurance is $1,200 a year for a 60-year-old man and $1,960 for a 60-year-old woman for $165,000 coverage. 

 

Women have many unique characteristics such as longer life expectancies, less time in the workforce, and conservative investment tendencies that can all impact their needs in retirement.


No matter how old or young you are, now is the best time to start taking steps to secure your future.


Take control of your finances

 

Plenty is here to make it easy to take control of your finances. We know it can feel intimidating at the beginning, but we promise it’ll get easier and easier. And you’re not in it alone, we’re here to help.


We help modern couples make better financial decisions. Plenty brings you and your partner together on money, helping you communicate better and achieve your financial goals sooner. 


Come join us at Plenty where we can help you plan, invest, and strengthen your finances today and for many more years to come.


- Team Plenty


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This information is for general informational purposes only. It is not intended to constitute investment advice or any other kind of professional advice and should not be relied upon as such. Before taking action based on any such information, we encourage you to consult with the appropriate professionals. We do not endorse any third parties referenced within the article. Market and economic views are subject to change without notice and may be untimely when presented here. Do not infer or assume that any securities, sectors or markets described in this article were or will be profitable. Past performance is no guarantee of future results. There is a possibility of loss. Historical or hypothetical performance results are presented for illustrative purposes only.



Plenty was founded to democratize access to financial products and tools that accelerate wealth building. Plenty Financial and affiliated entities. (“Plenty Financial”) provide a web, mobile, personal financial management and educational platform to consumers; some of these tools are freely accessible to all consumers, others require a fee-based subscription. Advisory services are provided in the form of software-first financial planning and investment advisory services for fee-based Subscribers. Plenty Financial RIA, LLC is an SEC-Registered Investment Advisor. All investments made are legally owned by you. Investing is inherently risky and Plenty does not guarantee positive performance. Investments are held in accounts at BNY Mellon | Pershings, the world's largest securities servicing company and are SIPC insured. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.


Brokerage services are provided by Atomic Brokerage LLC "Atomic Brokerage", member FINRA and SIPC. Clearing and custody services are provided by Brokerage firm BNY Mellon Pershing, member SIPC. Plenty Financial RIA, LLC has a relationship with Atomic Brokerage to manage and execute investments on behalf of customers. Subadvisory services are offered through Atomic Invest LLC ("Atomic Invest"), an SEC-registered investment advisor, member SIPC. Atomic Invest was formerly known as Helium Advisors LLC.


Return data used in the interactive tool are hypothetical performance data which contains inherent limitations and is not a substitute for actual investment returns derived from a live portfolio. There are numerous risk factors related to trading and markets which cannot be fully accounted for when depicting Hypothetical Performance. Consequently, future returns are not guaranteed, and a loss of principal may occur. THIS IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE. This site/application has been prepared by Plenty and is not intended to be (and may not be relied on in any manner as) legal, tax, investment, accounting or other advice or as an offer to sell or a solicitation of an offer to buy any securities of any investment product or any investment advisory service. The information contained in this site/application is superseded by, and is qualified in its entirety by, such offering materials. This site/application may contain proprietary, trade-secret, confidential and commercially sensitive information.


By accessing this site, you signify your agreement with and understanding of the following Terms of Use and Legal Information pertaining to both this site and any material in it. Plenty owns and maintains this site. No act of downloading or otherwise copying from this site will transfer title to any software or material at this site to you. Anything that you transmit to this site becomes the property of Plenty, may be used by Plenty for any lawful purpose, and is further subject to disclosure as deemed appropriate by Plenty, including to any legal or regulatory authority to which Plenty is subject. Plenty reserves all rights with respect to copyright ownership of all material at this site, and will enforce such rights to the full extent of the law.


Plenty was founded to democratize access to financial products and tools that accelerate wealth building. Plenty Financial and affiliated entities. (“Plenty Financial”) provide a web, mobile, personal financial management and educational platform to consumers; some of these tools are freely accessible to all consumers, others require a fee-based subscription. Advisory services are provided in the form of software-first financial planning and investment advisory services for fee-based Subscribers. Plenty Financial RIA, LLC is an SEC-Registered Investment Advisor. All investments made are legally owned by you. Investing is inherently risky and Plenty does not guarantee positive performance. Investments are held in accounts at BNY Mellon | Pershings, the world's largest securities servicing company and are SIPC insured. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.


Brokerage services are provided by Atomic Brokerage LLC "Atomic Brokerage", member FINRA and SIPC. Clearing and custody services are provided by Brokerage firm BNY Mellon Pershing, member SIPC. Plenty Financial RIA, LLC has a relationship with Atomic Brokerage to manage and execute investments on behalf of customers. Subadvisory services are offered through Atomic Invest LLC ("Atomic Invest"), an SEC-registered investment advisor, member SIPC. Atomic Invest was formerly known as Helium Advisors LLC.


Return data used in the interactive tool are hypothetical performance data which contains inherent limitations and is not a substitute for actual investment returns derived from a live portfolio. There are numerous risk factors related to trading and markets which cannot be fully accounted for when depicting Hypothetical Performance. Consequently, future returns are not guaranteed, and a loss of principal may occur. THIS IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE. This site/application has been prepared by Plenty and is not intended to be (and may not be relied on in any manner as) legal, tax, investment, accounting or other advice or as an offer to sell or a solicitation of an offer to buy any securities of any investment product or any investment advisory service. The information contained in this site/application is superseded by, and is qualified in its entirety by, such offering materials. This site/application may contain proprietary, trade-secret, confidential and commercially sensitive information.


By accessing this site, you signify your agreement with and understanding of the following Terms of Use and Legal Information pertaining to both this site and any material in it. Plenty owns and maintains this site. No act of downloading or otherwise copying from this site will transfer title to any software or material at this site to you. Anything that you transmit to this site becomes the property of Plenty, may be used by Plenty for any lawful purpose, and is further subject to disclosure as deemed appropriate by Plenty, including to any legal or regulatory authority to which Plenty is subject. Plenty reserves all rights with respect to copyright ownership of all material at this site, and will enforce such rights to the full extent of the law.


Plenty was founded to democratize access to financial products and tools that accelerate wealth building. Plenty Financial and affiliated entities. (“Plenty Financial”) provide a web, mobile, personal financial management and educational platform to consumers; some of these tools are freely accessible to all consumers, others require a fee-based subscription. Advisory services are provided in the form of software-first financial planning and investment advisory services for fee-based Subscribers. Plenty Financial RIA, LLC is an SEC-Registered Investment Advisor. All investments made are legally owned by you. Investing is inherently risky and Plenty does not guarantee positive performance. Investments are held in accounts at BNY Mellon | Pershings, the world's largest securities servicing company and are SIPC insured. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.


Brokerage services are provided by Atomic Brokerage LLC "Atomic Brokerage", member FINRA and SIPC. Clearing and custody services are provided by Brokerage firm BNY Mellon Pershing, member SIPC. Plenty Financial RIA, LLC has a relationship with Atomic Brokerage to manage and execute investments on behalf of customers. Subadvisory services are offered through Atomic Invest LLC ("Atomic Invest"), an SEC-registered investment advisor, member SIPC. Atomic Invest was formerly known as Helium Advisors LLC.


Return data used in the interactive tool are hypothetical performance data which contains inherent limitations and is not a substitute for actual investment returns derived from a live portfolio. There are numerous risk factors related to trading and markets which cannot be fully accounted for when depicting Hypothetical Performance. Consequently, future returns are not guaranteed, and a loss of principal may occur. THIS IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE. This site/application has been prepared by Plenty and is not intended to be (and may not be relied on in any manner as) legal, tax, investment, accounting or other advice or as an offer to sell or a solicitation of an offer to buy any securities of any investment product or any investment advisory service. The information contained in this site/application is superseded by, and is qualified in its entirety by, such offering materials. This site/application may contain proprietary, trade-secret, confidential and commercially sensitive information.


By accessing this site, you signify your agreement with and understanding of the following Terms of Use and Legal Information pertaining to both this site and any material in it. Plenty owns and maintains this site. No act of downloading or otherwise copying from this site will transfer title to any software or material at this site to you. Anything that you transmit to this site becomes the property of Plenty, may be used by Plenty for any lawful purpose, and is further subject to disclosure as deemed appropriate by Plenty, including to any legal or regulatory authority to which Plenty is subject. Plenty reserves all rights with respect to copyright ownership of all material at this site, and will enforce such rights to the full extent of the law.