Here's How Much the Average Woman Has Saved for Retirement

Women generally outlive men, hence requiring a significantly bigger nest egg to support a comfortable lifestyle in retirement. However, women typically struggle to grow this nest egg, unfortunately.

Despite equal pay laws, women continue to face a persistent wage disparity. Additionally, many are forced to temporarily leave the workforce to care for their families, which hampers their earning potential and can hinder career progression. This has a significant impact on their retirement savings, resulting in a notable discrepancy compared to men.

Here are the current median retirement savings for women compared to men.

This is roughly 44% less than the average man's $170,942. However, this picture might still be a bit too optimistic.

The issue with averages is that they can be greatly influenced by a small number of high-income individuals, making them a misleading representation. To get a more accurate picture of the average person's situation, many people rely on the median, which is the middle value in a given data set.

On average, women have saved about $31,291 for retirement, while men have saved $45,106. Similar to the average savings, men have around 44% more than women. Unfortunately, neither amount is enough to ensure a comfortable retirement.

It's worth noting that the graphic depicts workers at various stages in their careers. For some individuals, balances close to the median may indicate they are financially well-positioned, especially given they are likely still many years from retirement. On the other hand, workers nearing retirement with balances in the $30,000 to $45,000 range are likely to face more financial concerns.

Ways to Enhance Your Retirement Fund

Many women tend to earn lower incomes, with the result being fewer options when it comes to allocating funds for retirement savings. However, there are a few strategies that may help them boost the growth of their retirement savings.

Take advantage of your full employer matching contributions in your 401(k) plan.

You may be eligible for a certain amount each year, typically ranging from a few hundred to a few thousand dollars, which could add up to tens of thousands of dollars by retirement.

This figure tells you how long you'll have to work for the company before you're allowed to keep all of the money your employer contributed to your 401(k) account. A good idea is to stick with the company long enough to become fully vested so you don't end up losing any of that valuable retirement money.

Select your retirement accounts thoughtfully

Focus on retirement accounts that offer the most tax advantages. If you think you'll be taxed at a lower rate in retirement, a traditional IRA or 401(k) lets you delay paying taxes until then, when you may owe less to the government. Otherwise, consider Roth accounts, which require upfront taxes but give you tax-free withdrawals in retirement.

You can use these funds for medical expenses at any age or think of it as an IRA, but with the added benefit of tax-free medical withdrawals. However, to contribute to this type of account, you must have a health insurance plan with a deductible of at least $1,600 for an individual or $3,200 for a family in 2024.

Consider a spousal IRA

A stay-at-home partner can make IRA contributions if their working partner earns sufficient income to cover all contributions made to both partners' retirement accounts for the year.

Reassess and adjust your retirement plan as needed.

You should review and update your retirement plan at least once a year, or whenever your financial situation changes. You may also need to increase your monthly savings if necessary, or consider delaying retirement to give yourself extra time to accumulate the funds you'll need.

It's crucial to continually make adjustments throughout your journey. Delaying until retirement may necessitate significant changes to meet your expenses.