Women face unique retirement challenges — but advisors can help

Retirement planning is a complex journey, and for women, it presents a unique set of challenges. From the gender pay gap to longer life expectancies, women often face financial hurdles that can significantly impact their retirement savings and security. However, with the right strategies and guidance from financial advisors, these challenges can be mitigated, ensuring a more secure financial future.

One of the most significant challenges women face is the gender pay gap. In 2025, full-time working women are projected to earn just 83 cents for every dollar a man makes. This disparity can majorly delay wealth accumulation and reduce lifetime earning power. According to the National Women’s Law Center, women miss out on hundreds of thousands of dollars over the course of a 40-year career. Financial advisors can play a crucial role by educating their female clients on the importance of negotiating higher pay and advocating for themselves to narrow the gender wage gap.

Another critical factor is the longer life expectancy of women. Women live longer on average, which means they need to save more to ensure they don't outlive their retirement savings. According to the Institute for Women’s Policy Research Center, the median retirement income for women over 66 is 32.6 percent lower than for men. Advisors should help their female clients set higher savings targets and consider delaying Social Security payments to increase retirement income. Women are eligible to claim their benefits as early as age 62, but doing so prior to their full retirement age could reduce their benefits by as much as 30 percent. Delaying payments can help maximize retirement income.

Caregiving responsibilities also present a significant challenge for women. Mothers are four times more likely than fathers to miss work due to childcare, according to an analysis of U.S. Census Bureau data. Taking time out of the workforce may mean putting a pin in your retirement contributions, which can have a negative effect on your long-term savings. Advisors can help clients plan for increased contributions to retirement accounts when they return to work and suggest using spousal IRAs during career breaks.

Health concerns are another area where women face unique challenges. Out of the roughly 6.9 million Americans age 65 and older who have Alzheimer's, nearly two-thirds are women. This statistic is largely due to longevity, as women live longer on average. Advisors can help manage issues like cognitive decline by having a trusted contact on the account to assist with financial decisions if needed.

Retirement plans, such as 401(k)s and IRAs, play a crucial role in mitigating the financial risks women face during retirement. These plans provide structured ways to save and invest for the future, which is particularly important for women who often have lower lifetime earnings and fewer years of work due to caregiving responsibilities. According to the Transamerica Center for Retirement Studies, women have less than half the retirement savings of men, with an average of $44,000 compared to $91,000. This disparity highlights the need for women to take full advantage of retirement plans. Vanessa Okwuraiwe, a principal on the strategic leadership team at Edward Jones, emphasized during a webinar that advisors should start working with women clients early to ensure they are utilizing available tools like 401(k)s, 403(b)s, and annuities. Taking advantage of these tools early can help women be in a better position later in life if they decide to reduce their hours or leave the workforce to take care of a loved one.

Women with a personalized retirement plan reported being "very confident" in their ability to achieve their retirement goals at more than three times the rate of women without a plan. This underscores the importance of having a structured retirement plan. Advisors can help women maximize these tools by providing education on the benefits of early contributions and the importance of consistent saving. For example, a spousal IRA can help women keep up on retirement contributions if they are taking time off from work due to caregiving duties.

In summary, retirement plans like 401(k)s and IRAs are essential for women to build a strong financial foundation for retirement. Advisors can play a pivotal role by educating women on the importance of early and consistent contributions, helping them navigate career breaks, and planning for potential health issues. By doing so, advisors can help women mitigate the unique financial risks they face and achieve a more secure retirement.