Women are living longer—but are less prepared for retirement

Life expectancy for Canadian women is outpacing men, but many are less ready for the financial reality of retirement. Our latest survey of workers reveals where women are falling behind in saving for retirement. We’ll share insight on why this is happening and how you can help  your members reduce the retirement savings gender gap.

Canadians already enjoy a longer lifespan than many across the globe and Canadian women live to an average of 84—four years longer than men. That means more time to spend in retirement with family, pursue hobbies, and travel. But all of that takes money, and the women in your plan could be falling behind in preparing and saving for their next chapter.

Our latest study of workers, The 40-year retirement—balancing dreams and dollars , reveals a gap between men and women. Despite having a longer life expectancy, our survey found that women are frequently less financially prepared to fund what could be a lengthy retirement. This leaves sponsors and advisors with a challenge—and an opportunity—to help guide members in getting financially ready for their future retirement. 

How are women falling behind in retirement planning?

With a high cost of housing, multiple financial priorities, and rising prices, saving for the future can be tough for everyone in your workforce. But women in particular are struggling. Only about one-quarter have a formal and comprehensive financial plan for retirement, and just a little over half know if they’re on track with their savings. For those who actively track their retirement funding, most are falling short, and only 7% are ahead of schedule. Still, men aren’t much better prepared, as only 10% are ahead of schedule for saving.

Why are women falling behind?

There are multiple systemic reasons behind the difference between men’s and women’s retirement preparedness. During working years, women are more likely to undertake unpaid caregiving for both children and adults. While in the workforce, the gender pay gap continues, with Canadian women earning 87 cents for every dollar earned by men.

Many Canadians are behind on retirement preparations and plan to retire late to save more money. Unfortunately, delaying retirement doesn’t necessarily work out, as the average retirement age is well below the standard of 65. It’s 60.1 for men and even lower for women—58.8  So, not only are they living longer, they’re retiring earlier, lengthening the amount of time they have to live off their savings.

The financial priorities of women

Both genders agree that saving for retirement is important and should be a priority. However, most juggle multiple financial responsibilities. Women are more likely to focus on day-to-day bills, saving for emergencies, and housing compared to their male counterparts. This is especially true for mothers who are more likely to spend their income on children and family. Saving for retirement can understandably take a backseat to more immediate needs.

The gender gap: investment understanding

In general, many Canadians lack the knowledge to manage an investment portfolio with certainty. Fewer than half of women say they can confidently select and manage retirement funds. Many also worry about running out of money after they end their careers. One reason for this? Women have reported negative experiences with financial advisors when compared to men and say they value respect and plain language. This presents an opportunity for organizations seeking to better engage women in their workforce.

What happens to women in retirement?

Although many workers retire earlier than planned, most feel fairly good about their finances. In fact, women are more likely than men to pursue passions and grow their social circles during retirement. However, many must also fill a monetary gap due to lower financial security. Women are nearly twice as likely as men to cash out investments, sell property, and reduce spending because of money concerns. 

How sponsors and advisors can help women get retirement ready

Although there are many areas where women fall behind men in terms of financial preparedness, there are also some key areas of opportunity. Most actively want to become more confident in their financial decisions and are more likely than men to name their employer, financial professionals, and their retirement plan provider as an influence on their financial decisions.

Tips to help women get ready for retirement

• Leverage existing programs or tailor journeys to women
• Offer access to qualified financial advisors
• Expand conversations beyond money to include health, wellness, and social connectivity
• Partner with your recordkeeper to offer tools and resources
• Promote access to virtual events

Women make a big impact in the workforce, and you can help support their future with just a few changes.