All Articles

Women in Retirement Have It Worse 

The government attempts to enforce equality among its citizens. It’s easy for some to dismiss the earning disparities among minorities on the grounds being lazy, unreliable, etc. However, women in retirement have several odds stacked against them and it’s a much harder phenomenon to dismiss even for the self-righteous.

Women earn less than their male counterparts doing the exam same work. The numbers range from 15-20%. This holds true for healthcare professionals as well. There are many factors involved including sexism, women not demanding as many raises as men, work-life balance desires, maternity, health, etc.

A 15-20% difference in income is substantial. That’s the amount that most Americans set aside every year during their working years in order to secure a sustainable retirement.

As a man, if I knew that some dude was earning $300,000 while I was earning $240,000, I would be raising all sorts of hell. But this post isn’t even about the earning inequality between men and women. I want to delve a little deeper and discuss other problems that women in retirement have to face.


Women In Retirement

Retirement means different things to different people. In the US retirement generally means that you finally have access to your retirement accounts and that you are nearing your inability to sustain daily productive work.

Retirement for many also means having more time to spend with grandchildren or being able to pursue volunteer opportunities.

Women are more likely to care for others during their retirement. They are more likely to volunteer and more likely to spend money on others. This isn’t limited to family members but also others in their community.


Investment Portfolios

Women are more likely to admit that they have no fucking clue what the securities market is about. And that’s the truth, none of us understand the securities market – not you, not me, not a financial advisor, not economists, not even PhD’s who write thesis paper on it.

It’s said by many gurus that you shouldn’t invest in something you don’t understand. Those gurus have been able to convince themselves one way or another that they understand the securities market.

Others have decided to completely stay out of the securities market because it makes no sense to them. They opt for real estate or intellectual property or entrepreneurship.

For this reason, women are less likely to be invested in the securities market. And if they are, they are less likely to take on the risks necessary in the equities markets to produce the necessary returns. This can hurt their bottom line drastically – equities (stocks, as opposed to bonds) produce the majority of a retirement portfolio’s return.


Women in Relationships

I will generalize here and state that a lot of women in opposite-sex relationships give up their earning power and trade it for a homemaker role.

Even though the data shows that women are better savers than men and even better long-term investors, they might be ready to give up control of the household budget to their male counterparts.

Women who are in same-sex relationships take on similar roles – the dominant and the less dominant (dependent). If the less dominant woman goes from relationship to relationship giving up control over her finances then she would face the same problems as a woman in a heterosexual relationship.

Single Women vs. Single Men

The situation isn’t much rosier when comparing single women in retirement to single men. The average single male individual has a retirement balance of around $120k by age ~65. A woman in retirement on average has $70k in the same accounts.

Though women are statistically better savers, their portfolio balance doesn’t reflect this trait. It’s postulated that it has to do with how women view risk versus how men view risk.


Relationship Dynamics

Like most things on this blog, I love to stereotype, generalize and pass judgement. Anything less than that wouldn’t be worth typing. When it comes to childcare it seems that women have a harder time ignoring children. They are less likely to run out on them. Absent parenting seems to be more a guy-thing.

A woman in retirement or during her working years could be stuck with not only a higher financial commitment to children but a higher time commitment as well.

Men tend to be more physically violent towards women than women to men. I don’t know about emotional violence – I figure the sexes are equally accomplished in that department. Emotional violence can be curbed by shopping, binging, drug addiction, and the occasional psyche visit.

Physical violence is much tougher to deal with in terms of productivity. There is the whole fear of death thing, the bruises, missed days from work… low self-confidence. Or the dude showing up to your work and making you look bad in front of your colleagues.


Interrupted Work

As a man I might depend on my female partner to take care of the household and child. Should the relationship end I still have my job and my place in society. I didn’t sacrifice those for parenthood or the relationship.

As a woman, if I interrupt my career to take care of the child and household then I’m also giving up my place in society. It’s really fucking hard getting back to the same point once you leave it.

A career is designed to work on a continuum. If you interrupt it then it’s designed to punish you. Those who sell themselves to their career are far more likely to benefit from the advantages of a career.


Women & Health

I totally get the new-age pressure to think that everyone is equal. I’m sure there is a woman out there who can match the world record bench-press. And I’m sure there is a dude out there who could pop out a baby.

But the fact remains that women tend to have more health issues during their working years. Men have these health issues often after retirement age. Besides the violence thing mentioned above which would lead to more mental health issues and more ER visits, autoimmune diseases are more prevalent in women.

And of course there is the reproductive health thing. Women take on the majority of the responsibility of pregnancy prevention. They have to take medications, have procedures done, and deal with side effects.

Oh and there is the monthly period thing. A simple thing for some women but quite a nuisance for others. And finally, pregnancy. Yea, that 9-month thing followed by sleepless nights of breastfeeding.

Adding all these things up can take quite an economic productivity toll on a woman’s life. It’s not to say that all these things are bad. But we have a society which is male-dominated. The denominator, therefore, is the performance of a male in society.


More Years Spent In Retirement

The other discrepancy involves the years spent in retirement. Women live longer than men so will likely need more resources to navigate a traditional retirement.

More years means more exposure to the volatility of the market. Combining this with the risk-aversion women supposedly demonstrate in their portfolios, it can cripple a retirement plan.


Bad Retirement Advice For Women

Even though well-intentioned, the general retirement advice is pretty shitty. And retirement advice geared towards women is even worse.

The Wiser Women website recommends that women replace 100% of their pre-retirement income. Can you imagine how hard it is to generate 100% of your working-income for 20-30 years during retirement?

If a woman earns $100k before retirement then she would need a $2.5 million investment portfolio. Now, for a woman who retires at a traditional age, that’s not too bad. But that would still mean that she would have to set aside $2,700/month for 35 working-years. And that’s just for herself.

What about the woman who earns $25,000 a year. To reach a $600k portfolio in retirement that could support this $25k income, she would need to save $500/month for 45 working-years. Not easy at all.


How To Remedy The Problem

Obviously, female entrepreneurs could charge women 15-20% less money than their male counterparts. That could make up for quite a bit of the income inequality.

Government Intervention

The Government could allow women to access their retirement accounts earlier than men. They should also allow women to contribute more towards retirement for the reason of the income inequality alone.

Getting rid of or extending the RMD might help women in retirement with the tax burden of retirement earnings.

It makes no sense that the government adopts an agism attitude of allowing catch-up contributions for those past age 50 but draws the line at favoritism towards a particular sex.

Expert Advice

Wealthy individuals tend to do well financially because they are willing to spend money on expert advice. I have stressed the value of having a financial adviser before and seem to be the only personal finance hobbyist to do so.

Commonly, healthcare professionals hire financial advisers as soon as their hit their 50’s. That’s 2 decades of missed opportunities unless of course you already know everything about finances yourself.

I don’t think it matters if your financial adviser is a man or a woman. The current sad conditions of our “advanced” society is that women are probably an even more oppressive force on other women than men. So choose based on competence and address the common retirement pitfalls with your adviser.

Do Your Own Research

Personal finance is not an interesting topic but it’s a necessary topic for women in retirement. Before being able to make important financial decisions it’s necessary to gather some facts and understand the terminology. This can make communication with financial experts that much more efficient.

I would advise anyone at risk for an inadequate retirement to learn from the mistake of others. This involves talking to those women who have already retired and those who are nearing retirement.


Curbing healthcare expenses is critical for all women in retirement. Healthcare in the US is a purely financial entity. Your actual health has very little to do with healthcare – fortunately. Prevention is going to be the most cost-effective method.

Healthcare spending for women in retirement is said to be in the $100,000-200,000 range. If you’re a die-hard longevist then be prepared to pony up much more than $200k. Otherwise, it’s rare that your expenses would ever come close to those numbers as long as you educate yourself about your health.

Don’t Depend On Your Partner

I know this sounds a little cold but it’s not meant to reflect poorly on your partner. The bigger problem with depending on your partner financially is that it can create resentment, put unnecessary pressure on your partner and it could hurt you in the long-run.

Women in retirement can depend on their partner without any hesitation – as long as they are in as much control of the finances as their partner.

Take a proactive role in personal finance. One day a friend or a daughter will need that advice from you. Earning the income of a healthcare professional comes with a lot of responsibilities – handling the financial side of it is just one of many.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.