Women Retire With $70K Less Than Men — and It Puts Them at Serious Risk
Written by
Gabrielle Olya
Edited by
Molly Sullivan
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Many Americans have insufficient retirement savings, but women are particularly at risk. A new Clever Real Estate survey of current retirees found that women have an average of $261,763 in retirement savings — nearly $70,000 less than men, who have $330,305 on average. That gap has real consequences for women’s long-term financial security.
In this “Financially Savvy Female” column, we’ll explore why the divide persists and how it leaves retired women particularly vulnerable.
Why Women Retire With Less Money Than Men
Several key factors contribute to women entering retirement with significantly fewer financial resources than their male counterparts.
“On the most fundamental level, it’s very difficult to save for retirement if your income is lower or you’re living paycheck-to-paycheck,” said Nick Pisano, data writer for Clever Real Estate. “Just 45% of women say their income was high enough to save adequately for retirement, compared to 57% of men.”
Lower lifetime earnings — driven by pay gaps, career breaks for caregiving and part-time work — mean many women simply have less money available to contribute to retirement accounts in the first place.
Financial knowledge gaps also play a role. The survey found that over two-thirds of women (68%) wish they better understood retirement savings and investments when they were still working, while just 58% of men say the same.
“Along similar lines, 47% of men say they correctly knew in advance how much they needed in savings to retire, 10 percentage points more than the number of women who feel this way (37%),” Pisano said.
Without knowing how much they’ll need, women may undersave early on when contributions matter most.
How Compound Interest Widens the Retirement Gap
The less women save for retirement, the less opportunity these funds have to grow over time via compounding interest.
“Compound interest may be the key factor in separating those who retire comfortably from those who don’t,” Pisano said. “Even if the difference in annual income and savings is small between men and women each year, the additional money saved by men continues to grow and compound, with higher initial investments leading to higher gains, which in turn fuel larger account balances that continually grow from their own profits.”
Just a few hundred- or thousand-dollars difference per year could mean tens or hundreds of thousands of dollars difference after this money has grown over decades.
“This is also the reason it’s vital to start saving and investing for retirement as early as possible — to take advantage of the additional growth that longer timelines provide,” Pisano said.
Why Lower Savings Leaves Retired Women Financially Vulnerable
Women’s lower savings levels translate into greater financial uncertainty once they’re retired.
Only 40% of women are confident that their retirement savings could withstand another major economic downturn or recession, 10 percentage points less than the 50% of men who think this. In addition, just over half (56%) of female retirees are confident they could cover an unexpected $5,000 expense without significant financial stress, compared to 65% of men.
Given that women tend to live longer, often face higher healthcare costs and are more likely to spend years alone due to widowhood or divorce, these lower savings levels put them at significantly higher risk of financial instability later in life.
What Women Can Do To Strengthen Their Retirement Outlook
While systemic issues drive much of the retirement readiness gap, there are steps women can take to help improve their financial security:
- Start investing early, even in small amounts, to take advantage of compounding.
- Take full advantage of employer 401(k) matches.
- Use catch-up contributions after age 50 to boost savings.
- Seek financial education resources to improve confidence and long-term planning.
Even modest increases in contributions can meaningfully improve retirement readiness over time.
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