3 Reasons Why Women Save Less for Retirement

It's important to enter your retirement years with a fair amount of money saved up. Social Security won't be enough to replace your former wages in full. Rather, those benefits will replace just a fraction of them. And if you want financial flexibility and stability in retirement, you'll need to go in with a solid nest egg.

Unfortunately, though, many women are at risk of coming up short with regard to retirement savings. In a recent blog post, financial guru Suze Orman cited research from T. Rowe Price, which found that women, on average, contribute 43% less to workplace retirement plans than men. Here are some of the reasons women's long-term savings aren't on par with men's.

1. Women earn less

Data from the Pew Research Center reveals that the gender pay gap is still very much alive and well in the U.S. In 2022, women earned an average of 82% of what their male counterparts took home. That's only a slight improvement from 2020, when women earned 80% as much as men.

2. They have more educational debt

An estimated 23% of women take on debt in the course of getting a degree. By contrast, only 14% of men have to go the same route. Among millennials who borrowed for education, women had an average debt load of $19,300, while men only had to borrow $12,900. For Generation X borrowers, the average balance for women was $23,000. For men, it was $15,000.

3. They're more likely to be caregivers

Up to 81% of all caregivers are female, says research from the University of Missouri - Kansas City. And women might spend as much as 50% more time than men providing care. Because of this, women are more likely to have to take a career break or time off of work, which no doubt impacts their earnings. And the less women earn, the less easy it becomes to fund a retirement plan.

How to ramp up your retirement savings

Whether you're saving for retirement in a 401(k) through your job or an IRA account you manage on your own, there are steps you can take to boost your contribution rate. And the sooner you do, the more wealth for retirement you stand to build.

First, fight for a fair wage if you're not being compensated equitably. Research salary data for your job and industry and see how your wages compare. If you can make the case that you're underpaid, your employer might agree to boost your pay, which could make it easier to carve out money for a retirement plan.

At the same time, work on growing your job skills. The more skills you have, the easier it becomes to command a higher wage.

What's more, if you're on a career break right now due to being a caregiver, try to keep your skills current. And, if possible, try to earn a small paycheck doing some sort of side gig. Not only might that put a little extra money in your bank account, but it could help you avoid the type of resume gap that could be harmful to your career.

It's unfortunate that women have less savings for retirement than men, but it's also not particularly shocking. But you shouldn't just resign yourself to having less money during retirement. Instead, take steps to boost your IRA or 401(k) plan contributions so you're able to enjoy the comfortable retirement you absolutely deserve.