Is there a difference in retirement planning for men and women?

5 minute read

The question of whether there is a difference in retirement planning for men and women is both relevant and complex. It hinges on various factors, including longevity, income disparities, investment strategies and the impact of social security and pension benefits.

Understanding the potential differences enables you to tailor your retirement strategies to meet your unique needs effectively. Recognizing these differences is the first step toward achieving a secure and comfortable retirement for both men and women.

Longevity and life expectancy

Women generally have longer life expectancies

It’s a well-established demographic fact that women, on average, live longer than men. This longevity gap has been attributed to a combination of biological, behavioral and social factors.

Biologically, women are predisposed to certain genetic advantages contributing to longer life spans. Behaviorally, men are more likely to engage in risky behaviors and have higher rates of smoking and alcohol consumption. Socially, women often have stronger social networks that contribute positively to their mental and physical health.

Impact on retirement planning

Firstly, an extended lifespan necessitates a larger retirement fund to cover additional years of living expenses. This challenge is compounded inflation, which can erode the purchasing power of retirement savings over time.

Secondly, as women live longer, there’s a higher probability they will require long-term care services at some point. Planning for these potential costs becomes an essential component of a comprehensive retirement strategy.

Finally, the sequence of returns risk is another consideration. This risk refers to the timing of investment returns, especially in the early years of retirement. Negative returns early in retirement can have a disproportionately adverse effect on the sustainability of withdrawals from a retirement portfolio. Given their longer life expectancies, women have a longer time horizon over which these risks could impact their retirement security.

Earning potential and income disparities 

Gender pay gaps and career progression

The gender pay gap is a persistent issue that reflects the difference in median earnings between men and women. This gap is influenced by a variety of factors, including but not limited to occupational segregation, where women are overrepresented in lower-paying sectors; gender biases in hiring and promotion practices; and the career interruptions women are more likely to experience due to caregiving responsibilities.

These factors not only affect women’s income levels but also their career progression opportunities, potentially limiting access to roles with significant earning potential and benefits, including retirement contributions.

Effects on retirement savings and future income

The implications of earning disparities extend far into retirement. And since retirement account contributions are often a percentage of income, the gender pay gap exacerbates the savings gap.

Social Security and pension benefits

Differences in Social Security benefits

Social Security benefits represent a foundational component of retirement income for many Americans. However, the amount of these benefits can vary significantly between genders due to differences in lifetime earnings, years worked, and the age at which benefits are claimed.

Since Social Security benefits are calculated based on an individual’s 35 highest-earning years, women, who may have lower lifetime earnings and fewer years in the workforce due to caregiving responsibilities or part-time employment, often receive lower benefits than men.

Moreover, the decision of when to claim Social Security benefits is crucial. Claiming benefits before reaching full retirement age results in permanently reduced benefits, while delaying benefits beyond full retirement age up to age 70 can significantly increase the monthly benefit amount.

Women, due to their longer life expectancy, have more to gain from delaying their benefits to maximize their monthly income, a strategy that requires careful planning and consideration.

Spousal and survivor benefits

Understanding spousal and survivor benefits is particularly important for women, who are more likely to outlive their husbands and may benefit more from these aspects of Social Security.

Spousal benefits allow a person to receive up to 50% of their spouse’s benefit at full retirement age if this amount is higher than what they would receive based on their own earnings record.

Survivor benefits, on the other hand, allow a widow or widower to receive up to 100% of the deceased spouse’s benefit, provided certain conditions are met. These benefits can provide critical financial support for surviving spouses, who may see their household income significantly reduced upon the death of their partner.

Given the complexity of these benefits and the strategies involved in claiming them, it’s essential for couples to consider their overall retirement planning strategy when deciding how and when to claim Social Security.

For women, who often serve as caregivers and may have disjointed work histories, understanding how to maximize these benefits can be crucial for ensuring financial stability in retirement.

Investment and risk tolerance

Differences in investment preferences

Research indicates that men and women exhibit different behaviors and preferences when it comes to investing. Generally, women tend to be more risk-averse than men, preferring investments with lower risk and potentially lower returns. This cautious approach is often attributed to a desire for financial security and stability, as well as differences in financial confidence and investment knowledge.

While risk aversion can protect against significant losses, it may also limit the growth potential of retirement savings. Given the lower average lifetime earnings and longer life expectancies of women, a too-conservative investment strategy could hinder the ability to accumulate sufficient retirement funds. Balancing security with growth is a critical component of effective retirement planning.

Significance of investment decisions on retirement planning

A portfolio that is too conservative may not keep pace with inflation, diminishing purchasing power over time. Conversely, a portfolio that is too aggressive may be subject to volatility, risking significant losses that could jeopardize retirement security.

For women, the challenge is to find a balance that addresses their longer life expectancy and the need for a larger retirement corpus, while also aligning with their risk tolerance and investment preferences.

Diversification across asset classes, sectors and geographies can help mitigate risk while providing opportunities for growth. Regular portfolio reviews and adjustments in response to changing market conditions and life stages are also crucial.

Final thoughts

Exploring retirement planning through the lens of gender differences highlights the importance of personalized strategies to address the unique challenges faced by men and women.

From understanding the impact of longer life expectancies and income disparities to navigating the complexities of Social Security and pension benefits and tailoring investment strategies to individual risk tolerances, it’s clear that a one-size-fits-all approach does not suffice.

Women, in particular, may need to adopt specific strategies to overcome the hurdles of lower lifetime earnings and longer lifespans, such as maximizing savings rates, seeking employment with robust retirement benefits, delaying Social Security benefits and embracing a more informed and strategic approach to investment.

Additionally, preparing for healthcare and long-term care costs, as well as seeking professional financial advice, can play crucial roles in securing a financially stable retirement.

This comprehensive approach underscores the need for tailored advice and planning to navigate the complexities of retirement planning effectively. By doing so, both men and women can work toward achieving a secure and comfortable retirement, equipped with the strategies to address their specific needs and circumstances.


This article was written by True Tamplin from Forbes and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to

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