When it comes to retirement planning, women face a unique set of challenges that often leave them financially disadvantaged in their later years. Although women have made significant progress in the workplace, the reality is that many still retire with less money than men, yet need their savings to last longer. This creates what is often referred to as the “retirement gap” for women.
The Challenges Women Face
One of the most striking differences between men and women when it comes to retirement planning is longevity. On average, women live around five years longer than men, meaning their retirement years are extended. While this is a positive reflection of healthcare improvements and longer life expectancy, it also creates financial pressure. Simply put, women need to fund more years of retirement with, on average, smaller savings.
Earnings play a central role in this disparity. Women consistently earn less than men, even when doing the same work. As Keri-Lee Edmond, Consulting Analytics and Insights Manager at OMCC, explains: “In our large-scale data analysis, we found a significant gender pay gap of between 20% and 40%. If we look back over the years, this gap is widening. Although access to employment and management positions is improving (albeit slowly) for women, men continue to dominate the pay sphere, both in absolute incomes and annual salary increases.” This means that throughout their careers, women not only contribute less to their retirement funds but also have less disposable income to put toward additional savings.
The career paths of many women also play a role. Women are more likely than men to take breaks from work to have children or to raise families. During these years, their contributions to retirement savings are often paused. Even when they return to the workforce, many do so in flexible or part-time positions that allow them to balance career and family responsibilities. While this flexibility is invaluable for families, it often comes at the cost of lower salaries, fewer opportunities for promotion, and reduced retirement benefits. Over time, these interruptions and compromises can have a dramatic effect on retirement outcomes.
In addition to career breaks, women often continue to bear the lion’s share of household and caregiving responsibilities, even when employed full-time. This dual role can limit their ability to take on more demanding positions that might offer higher pay, further contributing to the income and retirement savings gap.
The 5 Golden Rules of Retirement Planning
The fundamentals of retirement planning remain the same, regardless of gender. Ninety-One, highlighted five golden rules:
- Start Early – The earlier you begin saving, the more time your investments have to grow.
- Stay Committed – Regular, consistent contributions build long-term wealth.
- Don’t Withdraw from Your Retirement Pot – Premature withdrawals erode future financial security.
- Invest for the Long Term – Compound interest is a powerful wealth-building tool.
- Invest for Longevity – Plan for the reality that retirement may last 30 years or more.
For women, these golden rules take on an added layer of urgency. Because women tend to live longer, they must plan for a retirement that could extend well beyond the average. In practice, this means saving more than men over their lifetimes to enjoy the same standard of living. When combined with lower average earnings and career interruptions, the gap becomes even more significant.
This does not mean women are powerless. Even small additional contributions, started early and maintained consistently, can go a long way toward closing the gap. Increasing contributions after returning to work from a career break, making catch-up contributions later in life, or working with a financial adviser to optimise investment strategies can make a meaningful difference.
To build a secure financial future, women should:
- Prioritise retirement contributions early in their careers, even if small.
- Increase savings whenever possible, especially after returning from career breaks.
- Consider professional financial advice to align investments with long-term goals.
- Leverage flexible investment options that adapt to career and lifestyle changes.
Retirement planning is not just about putting money away—it is about building independence, security, and choice for the future. For women, the combination of longer lifespans, lower earnings, and career interruptions makes it even more critical to take charge of their financial planning today.
Written by Sigrid
