4 Reasons Retired Women Need More Money Than Men
4 Reasons Retired Women Need More Money Than Men — And What To Do About it
June 6, 2024 by Jennifer Taylor
Like many things, retirement isn’t the same for men and women. Specifically, retired women tend to need more money than men.
There’s a variety of reasons for this, which can be frustrating for women. Retirement is often thought of as time to enjoy your golden years, but it’s hard to do so without sufficient funding.
Walking away from a steady paycheck can be hard — or even impossible — for women who don’t have the savings to do so. You’re not alone if you feel like you’re behind on your retirement savings, but you can catch up.
Here’s a look at some reasons why retired women need more money than men, and more on how an annuity could help solve this problem.
1. Career Interruptions
Women are statistically more likely than men to take time away from the workforce to care for others, like children or aging parents. For example, only about one in five stay-at-home parents in the U.S. are dads, according to the Pew Research Center1.
In 2023, 66% of women identified as caregivers, compared with just 34% of men, according to an AARP New York Survey. Of current and former women caregivers, 35% said they didn’t work while providing care2.
Taking time away from the workforce can have a profound effect on women’s retirement savings. While they’re not working, they’re of course not earning a paycheck, but they’re also not able to take advantage of any employer-matched retirement savings benefits or pay into Social Security.
Even when they return to the workforce, being away may impact long-term career growth. This can cause them to have a lower earning potential, which may limit their retirement savings.
2. The Gender Pay Gap
In 2022, women earned 82% as much as men on average, according to the Pew Research Center3. This isn’t anything new, as women earned 80% as much as men in 2002.
Not earning as much as men can impact women’s finances in both the present and future — like in retirement. For example, Fidelity® recommends putting 15% of your pretax income aside for retirement each year4.
However, working women might not be able to afford to save that much for retirement. Even if they can manage to do so, it won’t total as much as male co-workers earning more than them.
Social Security benefits are also based on average career earnings. In 2021, the average annual Social Security income received by women ages 65 years and up was $14,204, compared with $18,108 for men, according to the Social Security Administration5.