A new generation of women is stepping up to take control of their financial futures, but some still face barriers to saving enough for a secure retirement.

Employers have a vital role to play in providing the tools and resources women need to close the retirement savings gap.

The Challenges Women Face

Women have made huge strides towards financial equality in recent decades, now participating equally or even taking the lead in household financial decisions. Nearly 70% of women report being the primary or joint financial decision-maker, and 30% say they feel very confident managing their finances, according to a new study.

However, beneath these signs of progress lies a persistent retirement savings gap between men and women. The average man aged 55-75 has retirement savings of $157,000, while the average woman in that age group has just $50,000 saved, according to a Prudential survey. Even women nearing retirement are surprised to find themselves lagging so far behind their male counterparts.

This gap is driven by systemic barriers women face throughout their working years:

• Lower salaries: The gender pay gap means women have less income to put towards retirement savings in the first place.
• Career interruptions for parenting: Taking time off work or going part-time to raise children can significantly reduce lifetime earnings. A Columbia University study found women who take just two years off face a 40-90% deficit in retirement savings.
• Increased caregiving costs: Women are more likely to pay the high costs of childcare and elder care, reducing their ability to save at key points in their careers.

How can the next generation of women be assured of being able to take control and close this gap?

Starting Early is Key

The first step is starting early and consis­tently investing throughout one’s career. Consistent investing early allows savings to grow exponentially thanks to compound interest.

Unfortunately, over 40% of women report only feeling somewhat confident managing their finances. Having the right support and ad­vice early on can help women maximize their potential for long-term growth.

Now is an excellent time to start building these habits, as younger women are already highly engaged. More than two-thirds of wom­en report playing an active role in their house­hold’s financial decisions.

The commonly held myth is that employees should save only up to their employer match in workplace retirement plans. However, experts emphasize that the employer match is not enough. Employees should aim to save up to federal con­tribution limits in tax-advantaged accounts.

Making Room for Career Interruptions

Women need guidance on how to accom­modate common barriers like career interruptions without derailing retirement savings.

A key insight is that one’s income flow should not be a constraint on saving for retirement. Women who leave traditional employ­ment or scale back hours can still contribute to IRAs or other personal savings accounts. Re­tirement savings should be an ongoing habit, not something turned off and on based on ca­reer status.

In addition, female employees should be aware that their ability to overcome to the effects of savings interruptions increases the earlier they start saving. Getting an early start to retirement savings creates a buffer that allows contributions to pause when needed without major long-term consequences.

Planning Ahead for Caregiving Costs

Women should also plan ahead for periods where caregiving costs may spike—especially childcare and elder care—reducing disposable income. Caregiving expenses are top financial concerns for women that can significantly im­pact retirement readiness.

By discussing caregiving costs ahead of time with financial planners, working women can model different scenarios of how much changes in these costs may affect their abili­ty to save for retirement. Building emergency savings cushions, tapping home equity lines of credit if needed, and ramping up savings rates in earlier career stages can help compensate.

The key is being able to plan ahead by accurate­ly modeling future expenses over the long-term.

Accessing Professional Guidance

Getting professional financial guidance is key for women to navigate these complexities and successfully save for the long run. The unique hurdles women face may not be com­mon financial planning knowledge.

In one survey, 56% of women said financial planners were best suited to help them reach their financial goals. Yet many assume such personalized advice is only accessible to high­er-income individuals.

Employers should consider offering finan­cial wellness programs to connect female em­ployees with certified financial planners, on a group basis or through partnerships. Target­ed education from certified experts can better prepare women for the specific long-term chal­lenges they face.

Closing the Gap Through Workplace Benefits

Finally, employers themselves can provide benefits structured to close retirement savings gaps for women and level the playing field:

• Retirement savings education: HR teams should offer retirement savings education that highlights how women can accommo­date interruptions and caregiving costs.
• Match vesting: Short vesting periods on 401(k) matches disadvantage women who take maternity leaves. Lengthening vesting to 3-5 years better accommodates career gaps.
• Caregiving benefits: Paid family leave pol­icies, stipends for childcare and elder care, workplace flexibility programs, and remote work all help women handle caregiving with­out pensions taking a hit.

For more Employee Benefits resources, contact INSURICA today.

Copyright © 2025 Smarts Publishing. This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.