Women & Retirement


Investing, Retirement, Saving


April 20, 2023

Recent research from T. Rowe Price was short on good news for the retirement prospects of women. It reports that women, on average, contribute 43% less to workplace retirement plans, which goes a long way toward explaining why women have a lot less saved for retirement, and are logically less optimistic about their retirement.

And you don’t have to look too hard to find some leading causes for this retirement gender gap. It’s not easy to save as much as men when you’re not earning as much as them. And it is more likely you will have more debt, given that you don’t have as much income to support your household.

What is so frustrating to see is that women struggle far more than men with a debt that is not about spending on themselves, but trying to make more for themselves: 23% of women have student loan debt, compared to 14% of men, according to the T. Rowe Price report. Among millennials, women with student loan debt had $19,300 on average, compared to $12,900 for men. Among Gen X student loan borrowers in the survey, women’s average balance was $23,000, compared to $15,000 for men.

It is not your fault, or yours to fix alone.

I want to be very very clear: this is not any woman’s fault. Nor can this simply be solved by women asking for better pay. That’s not exactly easy when there’s a gender imbalance in management.

And in a society where there’s little support for raising children and caring for elderly family members, it still typically falls to women to fill those caregiver gaps, which either ends careers, downshifts careers, or creates long absences, all of which have obvious impacts on earnings, and thus one’s ability to prepare for retirement.

No shame, no blame. Do you hear me?

This is not your fault. And certainly not your responsibility to somehow fix all by yourself. That said, I also want to make sure you are making smart choices about the things that are in your control.

You are not on sale.

That phrase will be familiar to those of you who read my Women & Money book that was published more than 15 years ago. While I hope plenty has changed since then, you and I know there are still ways in which women can struggle to stand tall for what they are worth. So this bears repeating: If you don’t value who you are, and what you are worth, you can’t expect others to. Stand tall. Stand proud. And make a case to be paid what you are worth.

If you think you are underpaid, make your fact-backed case with your manager detailing what you bring to the team and industry/regional salary data, which is not hard to find online these days. It may not work, but you know what? It just may.

And if you are clear-eyed about your skills and value, I hope that you will not settle for no permanently. There are other jobs out there for you. It may take time to strategize and land a new job, but keep reminding yourself that you are not on sale.

And for my self-employed friends: please don’t tell me you haven’t raised your rates in more than a year. With inflation like it’s been? How is that respecting yourself?

And then just promise yourself that when you do make more, you will make smart decisions on how to use that deserved raise. Maybe it’s paying down debt faster or increasing your retirement savings. Or both.

Generosity must be kind to both the giver and the receiver.

It has yet to be scientifically identified, but there seems to be a female gene that compels us to take care of everyone around us, even if it means a bit of self-sacrifice.

Raising children is one thing, but with so many elderly folks living longer, it is falling on more middle-aged women to step up and take on the role of caregiving for elderly family members. There is no easy way around this. And I am not going to ever tell anyone to not do this. We take care of family. Period. But I am going to ask you to be as generous to yourself as possible.

If you want (or need) to stop working to care for an elderly parent or relative, if possible, they should pay you. Or if there are other siblings who can help out financially, they need to step up. I wish you didn’t have to be the one to bring up all of this—and maybe you won’t—but nor can you afford to remain silent. Your own retirement security demands it.

Say no out of love, rather than yes out of fear.

This one is hard. But I know that if you take a deep breath and really hear me out, you will understand the logic of what I am saying.

My experience is that women find it so very hard to say no to their loved ones who ask for financial support. This can be an adult child, sibling, cousin, or dear friend. The fact that you want to say yes is what makes you such a special person. But I am asking you to check yourself before you ever say yes. Are you doing it out of a sense of obligation? Out of fear they will be mad at you? Hello, aren’t you going to be mad at yourself if giving money to others means not being able to achieve your own financial goals?

And this extends to children you are still raising. When you say yes to every item they want, when you say yes to the more expensive college, and yet you know that the cost of constantly saying yes is that your own retirement is at risk, you are acting out of fear.

Please take a beat when you are contemplating spending requested by a child. And ask yourself if you are about to say yes out of fear their love is contingent on giving them what they want.

I understand how this can enter your thoughts, but it is so very wrong and damaging. For all of you. You will never be loved for the money you spend and give. Say no out of love for your child, knowing that by saying no to unnecessary big-ticket costs you are giving yourself more money to save for retirement. And raising your kid to have the right money values and love you for doing both.

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