Why Women Need Tailored Investment Strategies to Outlive Their Savings

The retirement landscape for women is uniquely fraught with challenges that demand a rethinking of traditional financial planning. Despite living longer than men-83.1 years for women versus 78.7 years in 2025-women face a paradox: they often retire with less savings and fewer resources to manage extended lifespans. This disparity is compounded by systemic issues such as the wage gap, caregiving responsibilities, and underpreparedness for long-term care costs. To mitigate the risk of outliving their savings, women must adopt tailored investment strategies that address these multifaceted challenges.

The Longevity-Savings Gap

Women's longer life expectancy inherently increases their retirement risk. According to a report by the U.S. Department of Labor, women retiring in 2025 have approximately 30% less saved than men. This gap is partly attributed to the persistent wage disparity, where women earn 84 cents for every dollar earned by men. Additionally, women are more likely to take career breaks for caregiving, which reduces lifetime earnings and Social Security benefits. These factors create a compounding effect: lower savings, smaller pensions, and reduced confidence in retirement planning. For instance, 84% of men feel secure about their retirement savings, compared to only 73% of women.

The Rising Cost of Long-Term Care

Long-term care expenses further exacerbate the financial strain on women. Data from the 2025 Milliman Retiree Health Cost Index reveals that women retiring at 65 are projected to face healthcare costs of $313,000 over their retirement lifespan. This includes an average of 3.7 years of long-term care, compared to 2.2 years for men. The median annual cost of a semi-private nursing home room alone reached $111,325 in 2024, and these costs are expected to rise. Crucially, Medicare does not cover most long-term care services, leaving retirees to shoulder these expenses independently. For women, who often lack sufficient savings, this creates a significant risk of depleting retirement assets prematurely.

Tailored Strategies for Women

To address these risks, women must prioritize strategies that account for their unique financial realities.

1. Long-Term Care Insurance: Policies providing $165,000 in benefits cost between $1,500 to $2,700 annually for women. These policies can shield retirement savings from the high costs of care services not covered by Medicare or Medicaid. Hybrid life insurance policies, which combine permanent life insurance with long-term care riders, offer an additional layer of protection while retaining a death benefit.
   

   

2. Health Savings Accounts (HSAs): HSAs provide tax advantages for covering long-term care insurance premiums or medically necessary expenses. Women should maximize contributions to these accounts, especially if their employers offer HSAs with favorable terms.

3. Diversified Investment Portfolios: Women, who tend to be more risk-averse, should balance growth-oriented assets with income-generating investments to combat inflation and ensure longevity of savings. Tax-advantaged accounts like IRAs and 401(k)s, along with catch-up contributions for those over 50, can help bridge savings gaps.

4. Social Security and Spousal Benefits: Delaying retirement to maximize Social Security payouts and leveraging spousal benefits can significantly bolster retirement income. Women who have spent time out of the workforce due to caregiving may benefit disproportionately from these strategies.

5. Medicaid and Asset Protection Planning: For those unable to afford long-term care insurance, Medicaid planning-such as establishing irrevocable trusts -can preserve assets while qualifying for public assistance.

Policy and Behavioral Shifts

Systemic solutions are equally critical. Increasing access to employer-sponsored retirement plans and encouraging higher participation rates among women, particularly women of color, can address structural inequities. At the individual level, women must begin planning early, as long-term care costs rise sharply with age. Proactive steps, such as purchasing insurance in their 50s or 60s, can lock in lower premiums and broader coverage.

Conclusion

The intersection of longevity, wage disparities, and rising healthcare costs demands that women adopt investment strategies tailored to their specific needs. By integrating long-term care planning, diversified portfolios, and policy-driven solutions, women can mitigate the risk of outliving their savings. As the financial landscape evolves, proactive and informed planning will remain essential to securing a stable retirement.