Lifestyle
Women tend to have different considerations on their path to retirement. Learn more about life expectancy, career trajectory, and the other elements.
Gail Kellner
Published June 15th, 2020
Updated April 1st, 2024
Gail Kellner
•
Published June 15th, 2020
•
Updated April 1st, 2024
Table of Contents
Key Takeaways
Women tend to retire earlier than men, but spend less time in the workforce.
Women, on average, outlive men by six to eight years.
Women tend to need to plan for a longer retirement with less money than men.
Women live an average of six to eight years longer than men. However, women tend to retire earlier than men, an average of one to two years earlier. This holds true in countries all over the world, not just in the United States. Why is the retirement age for women lower than that of men?
Women retire at an average age of 66.5, while men retire at an average age of 67.9. Why do women retire earlier than men if they live longer?
Why is there a retirement gender gap?
There are four main reasons why women retire at a younger age than men:
- Women are more likely to be downsized or laid off.
- Women are more likely to be full-time caregivers for aging parents, grandchildren, or special needs children.
- Women tend to marry men who are a few years older, and they retire at the same time.
- Women may suffer poor health that results in their leaving the workforce.
The Harvard Business Review points out that in tough times, women (and minorities) are much more likely to be downsized than men are. Women often work in human resources, public relations or marketing, which are valuable but not considered essential. Also, women tend to have been promoted to managerial positions later in life, which means when layoffs come around, they have less experience and less tenure than men in similar positions. Women often have shorter careers due to child-rearing responsibilities.
Another reason women tend to retire earlier is that women are often full or part-time caregivers for elderly parents, grandchildren, friends, in-laws and children. Not only is this exhausting, but it also impacts women in the workforce. Women are more likely to:
- Take a part-time job
- Pass up a promotion
- Retire early
- Reduce responsibilities or hours
This takes a toll on women’s physical and mental health. Health issues are another reason why women may retire early – all of this caregiving taxes physical health and may exacerbate chronic underlying problems.
Women often marry men who are a few years older than they are. When one spouse retires, the other usually follows suit. People often look forward to spending more time together when they retire.
Retirement considerations for women
Women often spend less time in the workforce. This means they earn less money during their working years which translates into less Social Security and pension benefits, and possibly contribute less to retirement accounts. One study estimates that women who retire early as a result of caregiving will lose about $50,000 in pension money with the total amount in lost wages and Social Security benefits is about $324,044. Another shows that women invest, on average, 40% less money than men do despite getting better returns.
Because women tend to spend less time in the workforce than men do, they retire at an age where they are reaching their peak earning potential. Men tend to have passed their peak earning potential by the time they retire. If women stay in the workforce until age 70, the gender gap closes. They’ll earn more money as they take on more responsibility, and they’ll earn more in Social Security benefits by delaying claiming benefits until then.
If both spouses have claimed Social Security benefits, each is guaranteed at least half of what the other would get at their full retirement age. This can be a massive retirement income boost for couples where one spouse has out-earned the other.
Planning to live longer
Life expectancy for women tends to be longer than men. Women need to plan accordingly in retirement, to adjust for their longer life spans. It’s not unheard of for a woman to outlive her husband by twenty years or more. It’s important to work as long as possible and to contribute the maximum to retirement accounts. Likewise, it’s important to have a good understanding of the household retirement assets and discuss short-term and long-term retirement plans openly with a spouse or partner. Social Security benefits can make a huge difference for a woman that outlives her partner and it’s important to have a plan in place if that were to occur.
Widows and widowers can choose to keep their own Social Security benefits, or take their deceased spouse's benefits. This is known as a survivor benefit. Ex-spouses are also eligible for a survivor benefit if the marriage lasted at least 10 years.
Determining healthcare costs
Women are more likely to have higher long-term health care costs, partly because they live longer and also because they are less likely to rely on other caregivers.
It’s also important to realize that women who retire before age 65 will not be eligible for Medicare. If she retires at age 62, that’s three years of health insurance she’ll have to pay for out of pocket since employer-subsidized health care benefits are no longer available.
Another thing to keep in mind is that since women outlive men, their husbands may deplete retirement accounts due to medical expenses. This leaves less for women when they need health care.
Bottom line
You deserve a clear view of what your retirement is going to look like. Join Retirable today and we'll help you identify income gaps, what you can expect from Social Security, and more.
Frequently asked questions
Is there a different retirement age for women compared to men?
While women do tend to retire earlier, the retirement age for Social Security benefits is the same for both women and men. The age at which you can start receiving full retirement benefits depends on your birth year, not your gender.
What is the full retirement age?
The full retirement age (FRA) varies depending on your year of birth. For those born in 1960 or later, the FRA is 67. For those born between 1943 and 1954, it's 66. If you were born after 1954 but before 1960, the FRA increases gradually by two months each year, reaching 67 for those born in 1960 and beyond.
Can women choose to retire earlier than the full retirement age?
Yes, women (and men) can start receiving Social Security retirement benefits as early as age 62. However, choosing to retire before reaching your full retirement age results in permanently reduced benefits.
How much is the benefit reduced if you retire early?
If you start receiving benefits before your full retirement age, your benefits are reduced by a fraction of a percent for each month you are early. For example, if your full retirement age is 67 and you start receiving benefits at 62, your benefit could be reduced by about 30%.
Is there an age at which you can receive extra benefits for delaying retirement?
Yes, if you delay receiving Social Security benefits past your full retirement age, your benefits will increase each year you delay, up until age 70. This increase is due to delayed retirement credits.
How do spousal benefits work in retirement for women?
Spousal benefits allow a lower-earning spouse to receive up to 50% of the higher-earning spouse's benefit at full retirement age. The amount of spousal benefit depends on the age at which the spouse claiming the spousal benefit retires, relative to their own full retirement age.
What about survivor benefits for widows?
Widows or widowers can receive survivor benefits starting at age 60 (or age 50 if disabled), which are based on the deceased spouse's Social Security benefits. The amount depends on the survivor's age and the benefits the deceased spouse was receiving or entitled to receive.
Are there any special considerations for women when planning for retirement?
While the retirement age and rules for benefits are the same for both genders, women often face unique challenges in retirement planning, such as longer life expectancies and potentially fewer years in the workforce. It’s important for women to consider these factors in their retirement planning to ensure financial security.
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Gail Kellner lives with her husband, two sons, and various fur-children. She writes about personal finance and insurance mostly, with a little bit of parenting thrown in. She also writes YA Fantasy fiction in her spare time, and her first YA novel will be published later this year.
Share this advice
Gail Kellner lives with her husband, two sons, and various fur-children. She writes about personal finance and insurance mostly, with a little bit of parenting thrown in. She also writes YA Fantasy fiction in her spare time, and her first YA novel will be published later this year.
