Broker Check

Are You Making the Most of Your 401(k)?

In this ebook, we outline your 401(k) choices and explore critical mistakes to avoid. Download it today

Thank you! Oops!
How Working Women Can Plan for Retirement

How Working Women Can Plan for Retirement

April 14, 2020

It’s more important than ever for women to get invested.

Provided by TechGirl Financial

Financial experts might give you the information that the retirement plan of every individual is distinct as every retiree has their own needs and preferences. But that’s not a concrete fact. There are married couples who might have preferred just one retirement plan to cover up all the expenses after retirement, for both the spouses.

Unfortunately, even now in 2020, women are still one step behind when they need to work out a solid retirement plan for their financial future. According to a recent NFCC survey, 39% of women in the millennial generation face difficulties to make their regular monthly bills payments on time.

On average, women have greater life expectancy compared to men. This situation gives a great challenge to the entire womanhood, especially to working women. It means women need to be more financially aggressive towards retirement planning. Having a longer life expectancy, women can have more time to cherish their retirement. But there’s always a catch. To enjoy a longer retirement life women may require more retirement savings.

So, as working women, they should focus on saving more money for their retirement days to live comfortably. But how to achieve that goal? Let me explain!

Retirement planning tips for women

a) Set a target and work on it

An important step to planning retirement for working women is preparing a base target for their savings goal. The saving goal they may choose after considering the type of lifestyle they will have in retirement. For example, working women who love to travel may require more money to retire compared to women who plan to downsize into a small house or intend to work even after retirement. Women who haven’t fixed a clear retirement plan should prepare one soon.

Women who deal with technology and believe in smart options must use a retirement calculator to calculate how much money they require to retire. As per a survey in 2018, 45% of women have less than $10,000 saved aside for retirement.

b) Concentrate on saving more

Women normally make only about 80.5 cents compared to a man, where a man makes a dollar for a similar job. Women normally take more time out of their work to take care of their families and kids.

These issues may add up, and women get smaller paychecks multiplied with fewer years in the workforce. As a result, it becomes harder for working women to save more money for retirement. If they opt for defined-benefit pension plans offered by employers, still they have to work more to get the entire benefits. Pension benefits might be calculated on earnings and work tenure. So if a woman works fewer years, the company pension will also pay less in retirement.

c) Pay off debts first

Having debts will always create a mess in the way of saving money for retirement. So, getting rid of debt should be a top priority task for women. Having debts not only prevents people from saving more, but it also affects the monthly budget.

By refinancing debts, working women may easily reduce the extra cost of high-interest rates on their credit cards or any other loans. If women are tied up with student loans, the private student loan refinancing option can lower interest rates and it can also lower monthly payments.

Before considering any refinancing option, it is also wise to think about other debt repayment options. Apart from refinancing, women can opt for debt consolidation services to manage their multiple debts.

This way their credit score will also remain unharmed. If being a working woman you face financial hardships and can’t pay off your debts entirely, then you may opt fordebt settlement option and settle your debts lesser than what you owe to the creditors.

d) Opt for employer-sponsored retirement plan

It can be very helpful for women who work full-time in the office. Women should save enough to match the contribution in their employer’s plan if the employer is offering the option. By choosing this option, they can save 10 to 15% of their income. It will be easier if they can opt for the Auto-escalation option.

Auto-escalation allows working women to increase the contribution rate automatically each year by a preset percentage. This way working women may grow their nest eggs quicker, without any hassle in their daily life.

e) Get an HSA and Roth IRA

HSAs are related to high deductible health plans and it will offer triple tax benefits – 1) tax-deductible contributions, 2) tax-deferred growth and most use 3) tax-free withdrawals for the health care expenses.

Working women may also opt for a Roth individual retirement account (Roth IRA) for saving.

A Roth IRA gives the benefit of tax-free qualified withdrawals during retirement. It is much beneficial for working women with high incomes and a higher tax bracket. A traditional IRA would be fully taxable at retirement, but it will offer tax-deductible contributions.


It’s more important than ever for women to get invested. Some of these statistics may feel overwhelming, but they’re not meant to intimidate. If you’re a woman investor (or want to be), facing the numbers and knowing the facts can very well be the motivation you need to take a more active role in your financial future. All it takes to get started today is a conversation with your financial advisor.

Need help? Kim Gaxiola, CFP® may be reached 800.584.3652 or at