Skip to main content

By Carol Church

Do you think you understand the differences between men and women when it comes to personal finance? Are you confident that the women in your own family are saving and investing adequately for the future? In Part 1 of this series, we went over some surprising facts about women and financial knowledge, debt, and investments. In Part 2, we’ll learn some facts about women and earnings, work, and retirement that may really make you think.

Part 2: Facts about Women and Earnings, Work, and Retirement

Women earn less money, on average.

Though the reasons for the wage gap are complex and involve more than simply paying women less for the same work as men, there is no doubt that it exists. On average, in the United States, women earn 83 cents to men’s every dollar. This basic fact disadvantages women on average as far as earnings.

(By the way, this is an area where the military comes out ahead. Unlike in the private sector, military earnings are transparent and fair—everyone doing the same job earns the same salary, regardless of gender, race, etc.)

Women are more likely to take a break from the workforce.

The world is full of people who need care, from young children to ill spouses to aging parents. The people who take time off to care for these people are much more likely to be female. On the whole, Pew Research Center recently found, 42% of women with children are likely to reduce their work hours to care for a family member at some point, and 40% are likely to take a significant amount of time off work to do so. Women are also much more likely to quit a job entirely to care for children.

Women in the military have somewhat better than average options here, with 12 weeks of paid maternity leave. While this may not sound like a lot, it is far better than what is available to many women in the private sector, who may only get 12 weeks’ unpaid leave, a protection that does not even apply to everyone.

Women are harder hit financially by divorce.

Divorce is tough on both genders, but it hits women harder. Divorced women have lower average incomes than divorced men and are more likely to live in poverty and to need public assistance. Their post-divorce incomes also fall much more dramatically than men’s.

Women are just as likely to be saving for retirement as men…but they have far less in their accounts.

Both genders face problematic shortfalls, but the situation is far worse for women, even young ones. This is due to the wage gap and “time off from work” problems discussed above.

This is another area where women in the military may have significant “leg up” on the civilian women, due to pay parity and the excellent TSP options available.

Women live longer than men and are more likely to die single.

The lifespan of the average American woman is 81 years, while the average American man lives to be 76. (Lifespans are likely to continue to lengthen—but with this increase will come more medical costs.) This simple fact means that women need to plan for more years of life and save more money. This is why I told my daughter that the impact of compound interest may matter even more to her.

Women rely more on Social Security—but they have less to draw on.

Due to their less extensive work histories, women are less likely to be able to draw a pension and have less significant retirement funds, so they rely more on Social Security in older age. According to a recent poll, 50 percent of retired women say SS is their main source of income, while only 38% of retired men say the same. However, the problem of having shorter work histories comes into play here yet again.

And the clincher: Women are far more likely to live in poverty in their elder years.

All of these facts about women’s lower earnings, lower retirement savings, the impact of divorce, reduced time in the workforce, and reduced stock market participation snowball into one very problematic fact: women are much more likely to experience poverty in retirement than men. They are 80% more likely to live in poverty at age 65, and three times more likely at ages 75 to 79. These facts are hard to acknowledge, but they are important to look at.

What Should We Do with All This Information?

If you’ve read this far, and these facts concern you, you may be wondering what the solutions are. While the answers are complex, experts do have some suggestions, from basic to not-so basic. They include:

  • More and better financial education for both genders, early in life
  • Increasing women’s financial and investment confidence
  • Paying closer attention to women’s retirement situation (for instance, military wives should be sure to fund their own retirement)
  • Working to close the wage gap
  • Finding ways to ensure that caregiving responsibilities do not torpedo women’s careers



Allington, A. (2016). Women more likely than men to face poverty during retirement.

Clydesdale, R. (2016). How parents can help their daughters avoid the financial gender gap.

David Lerner Associates. (2014). Women and Wealth Management: Is There a Gender Gap?

Long, H. (2017). Fresh evidence women are better investors than men.

Mosbergen, D. (2016). The Gender Gap That No One’s Talking About.

Nowak, J. (2017). Closing the Gender Gap: Financial Life Planning for Women.

Parker, K. (2015). Women more than men adjust their careers for family life.

Theodos, B., et al. (2014). Do Financial Knowledge, Behavior, and Well-Being Differ by Gender?

United States Census Bureau. (2011). Divorce Rates Highest in the South, Lowest in the Northeast, Census Bureau Reports.