Women and Retirement: Overcoming Challenges and Pursing Financial Security

Women and Retirement: Overcoming Challenges and Pursing Financial Security

July 22, 2023

Retirement planning presents unique challenges for women, making it crucial to address their specific needs and circumstances. Women often face hurdles such as career interruptions, lower pay, and longer life expectancies. Here are some key insights and strategies to help women navigate their retirement journey with confidence:

Longevity and Financial Security:

Women tend to outlive men, necessitating a longer retirement period and increased financial resources. Without appropriate planning and saving, there is a risk of prematurely depleting retirement assets and potentially facing financial hardship. It may be crucial for women to assess their retirement goals, calculate projected expenses, and implement strategies that account for an extended retirement horizon.

Equalizing the Gender Pay Gap:

Despite significant progress, a gender pay gap still persists. According to the U.S. Census Bureau, women earn about 75% of what their male counterparts earn. This income disparity makes it more challenging for women to save adequately for retirement. To mitigate this, it is important for women to advocate for fair compensation, negotiate salaries, and seek opportunities for career advancement. Additionally, working with a financial advisor can help develop strategies to potentially optimize your savings and investments despite income differentials.

Balancing Career Breaks:

Women often take time off from work to care for children or elderly parents, resulting in fewer years in the workforce compared to men. These career breaks can have a significant impact on lifetime earnings and retirement savings. To counterbalance this effect, women may consider exploring strategies such as part-time or contract work, maintaining skills through ongoing professional development, and engaging in retirement savings during periods of employment. By optimizing earnings and maximizing savings opportunities, women can bridge the retirement savings gap caused by career interruptions.

Navigating Retirement Plan Options:

As women are more likely to work in part-time or contract positions, they may not always have access to employer-sponsored retirement plans. In these cases, it may be beneficial to establish individual retirement accounts (IRAs) to continue building retirement savings. While employer-sponsored plans offer advantages like company matches, women can leverage IRAs to facilitate consistent contributions towards their retirement goals.

Retirement Planning Tips for Women:

In addition to these challenges, implementing the following strategies can enhance women's retirement preparedness:


1. Establish a Robust Safety Net:
Unforeseen circumstances such as divorce, death, or injury can disrupt retirement plans. Women may consider creating emergency savings accounts, consider life and disability insurance coverage, maintain a well-defined budget, and develop contingency plans to potential reduce expenses in case of unexpected events.

2. Continuously Develop Professional Skills:
Even during career breaks, it is important for women to stay engaged in their industry, attend professional networking events, and pursue educational opportunities to keep their job skills current. This positions them for successful re-entry into the workforce and ensures ongoing earning potential.

3. Save Strategically and Consistently:
Saving as much as possible, starting early, and maintaining a disciplined savings habit are key principles for achieving retirement security. Even during periods of part-time or contract work, it is important to contribute consistently to retirement savings accounts, enabling long-term growth and compounding.

4. Leverage Employer-Sponsored Retirement Plans:
If offered by an employer, participating in a retirement plan is highly advantageous. Women can maximize their contributions, aiming to receive any employer match available. This provides an opportunity to enhance retirement savings while benefiting from potential tax advantages.

Consult with Your Financial Professional:
At Freitas Wealth Management Group, we recognize the unique financial needs and aspirations of women investors. Our experienced team can provide personalized guidance and develop a comprehensive retirement strategy tailored to your specific circumstances and goals. Contact us today to review your financial situation.

The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal.  Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.