Hi, I’m Kathy Healy, managing partner of Healy Wealth Management. Today I’m here to talk about saving for retirement. There are always competing goals about how to use your money. The tension is between using your money to enjoy today or saving it to secure your future. Today I’m specifically going to talk about some challenges that relate to women. But if you’re not a woman, don’t tune out because the tips and takeaways will apply to everyone.

There are three big circumstances that are challenges for women and saving for retirement. The first one is life expectancy. Women have a longer life expectancy than men. The second one that I’m going to talk about is career gaps that women face. And the third one I’m going to talk about is the gender pay gap.

On average, women live five years longer than men. And at the end of their lives, 80% of women will outlive their husbands. You may know that life insurance premiums are more expensive for men, but did you know that long-term care insurance premiums are more expensive for women? If you visit a nursing home, you’ll see for yourself that 70% of the residents are women. So, in addition to needing to plan for more years of life in retirement, women also need to plan for higher healthcare expenses.

As we’re thinking about planning for retirement, we need to plan for more years in retirement than men. And we need to plan for higher healthcare costs. Women are more likely than men to take a break to care for their children or a sick relative. If you’re a stay-at-home parent, it can be an important way to provide for your family. But don’t forget about your career. It may help you later if you keep up with any licenses that you have, certificates in your career, or just stay up to date with what’s going on in your industry.

The gender pay gap, while it’s gotten better over the years, is now 82% of what men earn in the same jobs. This could make a $1 million difference over the course of a 40-year career for a woman with a bachelor’s degree. This has a cascading effect on your ability to save for retirement. In the first place, you have less expendable income to put toward savings, so you’re using more of your earned income on your living expenses and have less to save.

The second way this impacts you is your 401k contribution. So, if you’re earning less than your male counterpart and receiving a percentage of income from your employer towards your 401k, you’ll need to make a higher percentage contribution to get the same dollar amount as your male counterparts. And so, if your company is matching the percentage, you’re at a disadvantage there too. The final thing to consider is Social Security, which is also based on your income—the 35 highest years of income. So, if you’ve had a career gap and a gender pay gap, your Social Security benefit is going to be lower.

These are all things that you need to consider and think of ways to make up for. Nearly 50% of women surveyed fear running out of money in retirement. 60% of women say that they’re reluctant to invest due to lack of knowledge. The thing I want to say here is that a lack of confidence is not the same thing as a lack of knowledge. Women have the knowledge. Women have the ability. So, if you’re not confident, at least be brave and work toward saving for retirement.

Here are the tips and takeaways for everyone. You should work towards saving 15% of your household income toward retirement. The earlier you start, the better. It’ll make a big difference if you start saving for retirement at age 25 instead of 35. If you don’t have a 401k at work, find out if you’re eligible to contribute to an IRA or a Roth IRA and set up automatic savings.

For 401ks, your company can take the money directly from your paycheck and you’ll never miss it. But you can do the same thing for an IRA or a Roth IRA and set up automatic deposits from your bank account—pay yourself first.

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