The Gender Gap in Retirement Savings

Women are often shortchanged when it comes to retirement.

By Katrina Caruso


Women generally live longer than men and they tend to have lower incomes in retirement—a combination of facts that means a less than happy retirement for many women.

In the United States, women 65 or older are 80% more likely to live in poverty than are men of the same age, according to a 2016 study undertaken by the American National Institute on Retirement Security. Even worse, as folks age, the gap widens: women between 75 and 79 are three times more likely to be impoverished than their male counterparts. While American, these findings are relevant for Canadian women retirees, as the gender disparities here are very similar.

Reasons for this gender gap include women’s propensity to work part-time, at lower wages, and to spend fewer years in the workforce (typically due to childrearing and caregiving for spouses or parents). In addition, most Canadian women earn about 72–80% of what men earn—even doing the same jobs. That can add up to a difference of over $300,000 during a lifetime.

In terms of investing, women tend to be more risk-averse than men and so less inclined to invest their money aggressively. While being financially conservative may be the safer bet, it tends to produce less financial gain overall.

Furthermore, women usually live longer than their male partners, with the majority of women living to an average age of about 87 years, versus men’s average age of about 84 years. While three years may not sound like a lot, it’s three more years over which less income must stretch.

With this in mind, it’s all the more important that women are aware of their income and actively engaged in their savings by contributing to RRSPs and other savings plans such as TSFAs. If your spouse earns more, there also are options for them to contribute to spousal RRSPs or add to your TFSAs.

If you find yourself concerned, it may be time to seek the professional help of a financial advisor to learn where you stand and what your options are.

Photo: iStock/Wavebreakmedia.