Women face a series of challenges that add up to make retirement prospects “pretty bleak,” including issues such as gender pay inequality, longer life spans and a lack of savings based on U.S. Census Bureau data.
But Cindy Hounsell, founder and president of the Women’s Institute for a Secure Retirement, said during an event hosted by CNBC that there are ways to adequately prepare.
“The typical woman earns a lower salary than men: about 82 cents for every dollar, according to the Pew Research Center,” CNBC stated in its account of the event. “That gender wage gap, which has hardly improved in two decades, makes it harder to save for the future.”
On top of this, a woman’s savings generally needs to go further than a man’s since a woman who retires at age 65 lives an average of 21 years longer — or nearly three years longer than men who retire at the same time — according to data from the Employee Benefits Security Administration.
This often leads to women needing to make more difficult lifestyle concessions in later life, according to Marianela Collado, a certified financial planner and CEO of a financial advisory firm in Florida.
Caregiving responsibilities also often fall on the shoulders of women, which could further compound the issues they face, based on data shared from the National Institute on Retirement Security.
But there are proactive measures that can be taken.
“For example, if women think they’re underpaid, they can sit down with their managers at work, inquire about opportunities for growth and find avenues for higher earning potential,” Collado explained during the event. “Show managers where you add value and try to get fair compensation, she added.”
Auditing personal spending and taking advantage of employer offerings, such as a 401(k) match, could also make a difference for women saving for retirement, she added.
According to 2023 reverse mortgage use trends based on Federal Housing Administration (FHA) data, single women were the biggest demographic served by the Home Equity Conversion Mortgage (HECM) program in fiscal year 2023. They comprised 39.4% of all borrowers, while single men comprised only 20.8% of borrowers. About 35% of loans served multiple borrowers, likely in the form of married couples or cohabitating family members.
Single women also outnumbered single men among reverse mortgage clients in 2022, based on similar data from one year earlier.
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FAQs
Retirement is increasingly becoming a luxury many American workers cannot afford. With rising housing costs and medical expenses and without the pensions that buoyed previous generations, millions of older Americans can't stop working.
Why are women at greater risk than men in terms of financial security in retirement? ›
Women are more likely to run out of retirement savings, especially because older women are more likely to be the surviving partner, living on less Social Security income and with their partner's medical bills.
What is the hardest part of retirement? ›
Common challenges of retirement include:
Struggling to “switch off” from work mode and relax, especially in the early weeks or months of retirement. Feeling anxious at having more time on your hands, but less money to spend. Finding it difficult to fill the extra hours you now have with meaningful activity.
What do retirees say about retirement? ›
But in fact, many people don't want a life of pure leisure; half of today's retirees say they're bored and restless. A recent AARP/Roper Report survey found that 80% of baby boomers plan to work at least part-time during their retirement; just 16% say that they won't work at all.
What is the golden age of retirement? ›
There was never a “golden age” of retirement in America. Retirees 30 or 40 years ago did not have it better than retirees today. Retirees do not have it so much better in other countries. There is no nirvana of free everything for the over-65s.
What is a respectable age to retire? ›
For Social Security purposes, full or normal retirement age typically means age 66 or 67, depending on when you were born. Early retirement for you could mean retiring at 62 but it could also mean retiring at 40 if you're interested in the FIRE movement.
Are women 80% more likely to be poor in retirement? ›
Women are 80 percent more likely than men to be impoverished at age 65 and older, while women between the ages of 75 to 79 are three times more likely than men to be living in poverty. Widowed women are twice as likely to be living in poverty than their male counterparts.
Are men or women happier in retirement? ›
Certain researchers have found that women are more likely to be negatively affected by retirement in other ways than are men, including experiencing higher levels of depression, poorer health statuses, and inadequate incomes after retirement (Kim and Moen 2001: 85).
What are some of the factors that make it financially difficult for women to retire? ›
Unique Issues Women Face When Planning for Retirement
- The Gender Pay Gap. ...
- Child Rearing and Caregiving. ...
- Single Living and Widowhood. ...
- Financial Literacy.
1) Not Changing Lifestyle After Retirement
Among the biggest mistakes retirees make is not adjusting their expenses to their new budget in retirement.
Waiting Too Long to Plan
Along with getting a late start on saving, some retirees also ignored other planning activities. Many are realizing that mistake now, with the Schroders survey finding 63% of retirees wish they had done more planning before retirement.
What is the #1 retirement challenge? ›
Challenge #1: Longevity. According to the Society of Actuaries, a man in his mid-50s today has about a one-in-three chance of reaching age 90, while a woman of the same age has a roughly 50% chance. 1.
What is the biggest problem for retirees? ›
Retirement concerns for most people tend to center on health and money, which are in many ways intertwined. For example, your health plays into how long you can work, how much you'll need to spend on insurance and medical care, where you can live, and your quality of life in retirement.
At what age do most Americans retire? ›
What is the average age of retirement in the United States? Right now, the average age for men to retire is 65 while the average age for women to retire is 63. While many people say they will work for as long as they can, others retire earlier than expected.
How much money do most people retire with? ›
What are the average and median retirement savings? The average retirement savings for all families is $333,940, according to the 2022 Survey of Consumer Finances. The median retirement savings for all families is $87,000.
Are most retired people millionaires? ›
Only one in six Americans retire as millionaires. Achieving such savings is a gradual process that typically involves starting early and leveraging the benefits of compound interest.
What retirement income is considered wealthy? ›
Home equity and moderate nest eggs facilitate occasional luxuries and social engagements. With a net worth of $1.9 million, retirees in this percentile are deemed well-off, enjoying a lifestyle enriched by extensive savings and investments. This includes bucket-list travels, charitable endeavors and legacy planning.
Do the rich use retirement accounts? ›
“People have gotten wealthy selling 401(k) plans and IRAs — Vanguard and Fidelity have made a lot of money managing people's retirement [savings].” If you want to invest for retirement like the wealthy, here's how Cardone says to do it.
Why is retirement so expensive? ›
As we age, medical expenses increase, along with out-of-pocket expenses and deductible costs, not to mention the increasing cost of medical insurance. Many things such as dental, vision and hearing are not covered by Medicare and must be paid for by the individual.
