Money Monday: Why Women Need to Save More Than Men

Tips on preparing for retirement.

Posted: 02/11/2013 08:00 AM EST

Women earn 77 cents on the dollar compared with men and they’re less likely to be covered by company retirement and pension plans. Combine that with the fact that women tend to live longer, and it’s clear why they need to save conscientiously for retirement.

When it comes to retirement savings, women continue to lag behind men. “They’ll spend enormous time and energy taking care of everyone else, then neglect themselves,” notes Cindy Hounsell, president of the nonprofit Women’s Institute for a Secure Retirement. 

Women think of money as a family affair, to help the whole family, not as satisfying their needs.

Savings Handicap


What makes it harder for women? For starters, women live longer than men — about five years longer, according to the National Center for Health Statistics.

Women also have a savings handicap for the following reasons:

•    We earn less than men. While some reports suggest the pay gap is narrowing, the Census Bureau said in September that full-time women employees still make, on average, only 77 cents for every dollar earned by men.

•    We tend to spend less time on the job, because of care-taking responsibilities for children and elderly parents (or both), and we are more likely than men to work part-time.

Family Needs Versus Personal Ones

Then there are the personal issues. “The main difference I’ve found between men and women is that women think of money as a family affair,” notes Ginita Wall, a CPA and author of It’s More Than Money, It’s Your Life. “They think it’s there to help the entire family and don’t think of it as satisfying their needs.”

Salary Is Not the Critical Factor

Even women with CEO salaries may flounder when it comes to their own long-term financial planning. Ultimately, it’s your savings discipline, not your salary, that makes the difference. The urgent message is that women need to try harder to prepare for retirement — by saving early and consistently, and by making saving as much a priority as paying the mortgage or the utility bill.

What’s Your Retirement Number?


To jump-start your retirement planning, you should figure out the amount of money you’ll need to support yourself in retirement. You can get a rough estimate by looking at your W2 and subtracting Social Security and taxes from your earnings; what’s left is your disposable income. Multiply that figure by the number of years you expect to be living in retirement.

A retirement planning calculator can help, such as the Wells Fargo Quick View Calculator or the Ballpark Estimate from the American Savings Education Council. And to get an idea of how much you can save for retirement if you start early, try Wells Fargo’s Systematic Savings Can Pay tool.

This article has been prepared for informational purposes only. The accuracy and completeness of this information is not guaranteed and is subject to change. Since each individual’s financial situation is unique, you need to review your financial objectives to determine which approaches might work best for you.


© 2013 Wells Fargo Bank, N.A. All rights reserved.

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