Article Overview

Every woman knows that there are inequities between women and men when it comes to financial matters, but few know exactly what they are or how to overcome them. As we began researching women’s financial issues we were stunned at the scope of these inequities and offer this information in the hope that women will become aware of them and plan for their retirement accordingly.

1. Women earn less money – Every woman reading this has already experienced this inequity, but now you have the facts to back up your suspicions. Ten years after college women make only 69% of what their male peers earn even though they have slightly higher grade point averages than men do in every major (even math and science). Women who attended highly selective colleges earn the same as men who attended minimally selective colleges, which shows that they lack compensation for their scholastic performance. On average, full-time, year-round working women earn roughly 74% of what men earn.

What to do

Resourceful women have found ways to overcome this barrier including becoming business owners, budgeting with an emphasis on saving money, networking with other women (including online websites like, working harder and longer hours, getting higher education, extra part-time or home based jobs, making education about financial matters a priority, and countless other ways, include getting a financial plan.

2. Women’s Health Insurance May Cost More – High deductible health insurance plans cost women more. When an employer changes to a high-deductible plan, it costs on average $1000/year more for women than for men because of mammograms, the cervical-cancer vaccine, Pap tests, birth control, and pregnancy related services. Women also generally go to the doctor more regularly for preventative care.

What to do

While the inequity exists, women must make an extra effort to contribute the difference to a Health Savings Account or other savings. Medical expenses have risen dramatically the last several years so regardless of the kind of health insurance (or lack thereof), women must work toward having a contingency fund for medical and other emergencies.

3. Women May Take ‘Time-outs’ from work to care for children or aging parents which means less total earnings over time and less money automatically deposited into 401(k)’s. With the aging Baby Boomer population, many women will have taken time out to raise children and may need to take time out again to care for elderly parents. Caring for both ends of the age spectrum has historically fallen to women and shows that women are strong, loving, and selfless caregivers.

What to do

Being aware of how these ’time-outs’ can affect retirement can help women realize the urgency of continuing to contribute to a retirement account (or savings and investments) during times when they are not earning an income, and saving consistently while they are working.

4. Social Security Checks May be Lower because less money goes into Social Security accounts for women who earn less than men over their lifetimes, and for women who take ‘time-outs’ from earning an income.

What to do

Even if women make less money than men, being armed with the knowledge of how that may affect retirement should give women an extra incentive to contribute the most that they can into their retirement accounts, even if it means doing without some wants (not needs). Since no money counts towards Social Security during a ‘time-out’ it makes contributing to an IRA during these times even more critical.

5. Women Live Longer than Men – A longer lifespan requires more years living from retirement savings. The average lifespan for women is 79 compared to 72 for men. Therefore, women need to plan for at least seven more years of retirement. Living longer is a great problem to have; it just requires women to be aware of the need for more money in retirement as they create their financial plans.

What to do

If you are married make sure that you are putting as much in your account (or more) as your husband contributes to his. If you are single make sure that your retirement plans are geared toward a longer lifespan. Make sure that you have a financial plan.

6. Single Mothers are the Poorest in Retirement. Single mothers earn less than any other group (1/4 that of married couples with children and 3/5 that of single childless women).

What to do

With lower earnings and without the retirement benefits of a spouse, single mothers need to be especially savvy about finances in order to avoid poverty in retirement. Take every opportunity to educate yourself about your finances on everything from great budgeting habits to retirement planning. Get help from trusted advisors whenever possible. Also, many churches offer help and information for single parents such as free financial counseling, free oil changes, free school supplies, etc. eFinPLAN realizes that single parents really need a financial plan, that is why we offer 50% off.

7. Women May Make Less on their Investments because they invest more conservatively than men, which can sometimes prevent them from seeing the higher rates of return that men who take more risks may see. Women are legitimately more afraid to make any mistakes with their finances and prefer fixed/steady returns because making up for a mistake could take a lot longer for a woman who earns less than a man.

What to do

Seek help from trusted professionals and/or educate yourself about wise investing. If your company has a Human Resources department which oversees your 401(k) seek advise from them regarding your individual situation. Also, contribute the maximum amount to get matched contributions from your employer. In divorce situations, seek advise from your attorney to make sure that the investments will be divided evenly.

8. Women Are Not Well Represented in The Financial Planning Industry because it is dominated by males. Historically, very few women (or minorities for that matter) have gone into financial planning careers so women’s issues may have been unintentionally under-represented. Also, women have historically been more intimidated about financial issues and may also have deferred to their husbands regarding financial decisions leaving many questions unasked.

What to do

As a group, women need to become more educated about financial matters (including the inequities in retirement). The financial planning industry has begun to address the unique needs of women, but it will take some time for the industry as a whole to increase awareness. As with any other field, as women begin entering the financial planning industry women’s issues will begin to enter the forefront.

Creative Wealth for Women is a woman’s only financial empowerment workshop. For more information, click here!

Many aspects of financial matters are unique for women and should be taken into consideration in any financial plan. If you are able to afford a financial planner, make sure that they are aware of the inequities women face and are making your financial plans accordingly. Do not be intimidated or afraid to ask questions. You may even take this article with you to make sure you are on the same page. If you are not able to afford a planner consider doing the planning yourself online with

Please help us get this information to as many women as possible by forwarding to the women you care about.

Laura D. Irwin is CFO and co-founder of eFinplan, LLC. She has a degree in Communication, but her life’s joy has been raising her two children. She can be reached at

Kent E. Irwin is CEO and founder of eFinplan, LLC. He is also a Chartered Financial Consultant (ChFC), a Chartered Advisor in Philanthropy (CAP) and a Chartered Life Underwriter (CLU). He can be reached at For more information about eFinplan, visit

Copyright © 2008 eFinplan, LLC. All Rights Reserved. Used here by permission from the authors.

If someone sent you this article and you’d like to read more interesting tips, trick and philosophy on money and life, sign up today for Elisabeth’s FREE Weekly E-Zine, Financial Wisdom with a Twist and FREE monthly teleseminars at