Experts: 9 Ways Women Can Determine They Have Enough Retirement Savings
Written by
Jordan Rosenfeld
Edited by
Amber Barkley
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Even in 2024, women continue to earn less money on the dollar than their male counterparts, meaning that women potentially may have less in retirement savings than men. A 2023 study from Pew Research Center found that white women earn about 83% of what men earn, but women of color earn even less — about 70% for Black women and 65% for Hispanic women.
However, with smart financial strategies, women can still maximize their retirement savings.
Experts explain how women can determine if they have enough retirement savings and offer steps to take to maximize their savings, based on the unique socioeconomic factors that affect their earning potential.
Women Have Less to Save
“The gender pay gap often means that women have less to save and invest than men, according to Chelsie Moore, certified financial planner and director of wealth management solutions at COUNTRY Financial.
“This can also mean that fewer women are working full-time and, as a result, have less access to employer retirement plans than men. The gender pay gap also results in women having less retirement income from Social Security and pensions than men,” Moore said.
According to a survey from COUNTRY Financial, she said, 23% of women say it’s very likely they will have enough money to enjoy a comfortable retirement, compared to 29% of men, and 18% of women say it’s not at all likely, compared to 12% of men.
Take Advantage of Employer Sponsored Retirement Plans
Women who work outside of the home should make sure they take advantage of their employer retirement plan, such as a 401(k) or SIMPLE IRA, and work toward at least contributing enough to take advantage of the employer matching contribution, Moore explained.
“Spousal IRA rules provide a way for a working spouse to fund an IRA for a spouse who does not work outside of the home,” she added.
Seek Financial Advice
Women should not try to guess or go it alone when it comes to retirement planning, Moore said.
“Consider employing a trusted financial advisor to guide you with investment decisions. A good financial advisor will make sure that you understand your choices, will not pressure you to make decisions and will regularly review your investments with you.”
Evaluate Current Savings
Women can begin by assessing their existing retirement savings, according to Keisha Blair, a Harvard trained economist and policy expert and a certified holistic wealth consultant.
“Consider factors like age, desired retirement age and estimated life expectancy,” she said. “Various online calculators can assist in determining if savings are on track.”
Consider Lifestyle and Expenses
Next, Blair said, women should reflect on the expected lifestyle they’ll have during retirement and the associated expenses. “This includes healthcare, housing and leisure activities. It’s essential to factor in potential inflation and account for a comfortable standard of living.”
Assess Investment Performance
Review the performance of retirement investments, Blair urged. “Seek professional advice to ensure your portfolio aligns with your risk tolerance, time horizon and financial goals.”
Ask for a Raise
Don’t just leave your retirement savings up to chance, said Katie Kavehrad, a certified financial planner with Paradigm Wealth Partners. “If you are employed and working, ask for a raise.”
She added, “Like it or not, the gender pay gap continues to exist, and income can affect your ability to save for the future, as well as things like pension and Social Security benefits in your retirement.”
Be Disciplined
It’s also important to be disciplined with saving, and automate that process wherever possible to ensure that you pay yourself first, Kavehrad said.
“Take advantage of employer benefits, such as employer match contributions to a 401(k) or 403(b) plan and stock purchase plans,” she said. “Contribute to a Roth IRA or Traditional IRA either through earned income or spousal income, and max out the contribution each year.”
Play Catch Up
The IRS makes it possible for people who got a late start to make “catch-up” contributions, Kavehrad explained.
In 2024, the catch-up contribution for those 50 and older is $7,500 for a 401(k) or 403(b) and $1,000 for a traditional or Roth IRA.
Diversify Your Portfolio
Anne Lester, author of “Your Best Financial Life,” recommended that women “aim to diversify your portfolio with a mixture of individual stocks, bonds and index funds so that you reduce the amount of risk you’re exposed to.”
She pointed out that different sectors of the economy react differently to market conditions.
“Tech stocks often boom and bust with the broader economy…” she said, “whereas discount retailer stocks — and other value stocks, whose returns often come from dividends more than price appreciation — often do well when consumers collectively tighten their belts during a downturn.”
Historically, she said, the best recession proof stocks or ETFs to own include consumer staples, health care companies and pharmaceuticals. “So-called ‘sin stocks’ — think alcohol and tobacco — often do well during recessions, as well.”
Most of all, she said, “Don’t listen to so-called experts who claim there is only one right way to invest your money. Be skeptical and never stop asking questions.”
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