Save Smarter

3 Factors Women Need to Consider When Planning for Retirement

Article courtesy of Member One Federal Credit Union

Men and women share similar goals for retirement: security, a comfortable lifestyle, time with family, and hopefully a nice vacation here or there. But, the journey toward that goal can differ for women, who need to take into account a few unique factors including lifespan, lifetime earnings, and a traditionally more conservative approach to investing. Women do face distinct challenges and will generally need to save significantly more than men. However, the good news is that women tend to be more disciplined savers and more active participants in employer-sponsored retirement plans. Combine those traits with some careful strategy and consider these three factors as you map out your plans for your post-employment future. 


Statistically, women tend to outlive men, and that could mean your savings will need to last years longer than a man’s. Start saving as early as possible. Take advantage of employer-matching and aim to max out your 401(k) contributions if you have access to this type of plan. If your job doesn’t provide a retirement plan, you’re not without options. Start saving with a traditional or Roth IRA account, both of which are easy to open at your local credit union or bank. Many women are self-employed, and those who are can also consider a solo 401(k) or a Simplified Employee Pension (SEP) IRA. Additionally, consider purchasing long-term care insurance when you reach your fifties or sixties. 

Wage gap and fewer working years. 

Even today, the gender pay gap exists in many industries. Not only that, but women are more likely to take career breaks in order to raise children or care for elderly parents. A major step you can take both for your present and future financial security is to make sure you’re earning what you deserve—learn to research your value and to negotiate with current and potential employers. And, if your earnings stalled while you were caring for kids or other family members, know that you can make “catch up” contributions to retirement accounts after age 50. 

Greater risk aversion. 

Studies have suggested that women tend to invest more conservatively compared to men. That means lower exposure to risk and loss of wealth—but on the other side of the coin, it can also mean lost opportunities and lower gains. While you’re younger and further away from your target retirement age, it can make sense to be a bit more aggressive with your investing. As you get closer to retirement, err more conservatively with your investments. Consider working with a professional financial advisor to create a retirement strategy that works for you: one with the right balance of more secure options like money markets and share certificates/certificates of deposit, along with potentially higher-reward options like stocks, mutual funds, and exchange-traded funds. With their help, you can decide on the right risk/reward ratio to secure the retirement lifestyle that you want to lead. 

Join Member One here each month for more money-saving tips and financial advice! Be sure to visit their website, www.memberonefcu.com, for more info on their products and services. Member One Federal Credit Union is federally insured by the National Credit Union Administration.