From pay gaps to longer lifespans, a thoughtful plan can help make challenges manageable

Women make up more than half of the U.S. population, yet, historically, their particular financial needs and challenges haven’t always been considered. The reality is women face a distinct set of financial headwinds—structural, biological and cultural—that require candid discussion. For instance, women on average earn about 85 cents for every dollar earned by men¹. That wage gap compounds across an entire career, affecting everything from her ability to save for retirement to her Social Security benefits.

Whether you are single, partnered, early in your career or approaching retirement, the challenges you may face as a woman are measurable and—importantly—plannable. A well-designed financial plan can account for them and help turn potential vulnerabilities into manageable risks.

Understanding the challenges

To plan effectively, it’s important to understand the structural challenges that can shape your career path, earnings and long-term savings.

The wage gap: When women earn less, the impact extends beyond take-home pay. Many benefits are linked to earnings, including pensions, 401(k) employer matches, profit sharing and Social Security benefits. Lower earnings today can translate into lower income in retirement, making it especially important to focus on retirement planning as early as possible.

Longevity: From age 65, women live another 20.7 years on average compared to 18.2 years for men². That's a difference of about 2.5 years. From a financial perspective, a longer lifespan means funding more years of retirement, greater exposure to health care costs and more time for inflation to erode purchasing power. Retirement plans built for women must explicitly take this added longevity risk into account.

The cost of caregiving: Women are more likely than men to step away from the workforce to care for children or aging parents. These breaks often mean lost wages, lower earnings growth, and gaps in retirement savings and Social Security credits. Over the course of a career, even short breaks can compound into meaningful differences in long-term savings.

Career paths: By choice or necessity, many women prioritize flexibility in their careers—sometimes accepting lower-paying roles or positions with less competitive pressure in exchange for work-life balance.³

There are also less-discussed factors at play. Research suggests that hormonal changes around menopause can cause cognitive fog that lasts several years. Even highly accomplished women may find themselves struggling professionally during this period. Some respond by stepping back from demanding roles or making career changes without realizing that medical treatment or workplace adjustments might help them continue performing at a high level.

Confidence and participation: Many women defer to a spouse or partner when it comes to financial planning. While that may feel comfortable in the short term, it also introduces vulnerability. If a woman is divorced or widowed, she may find herself making decisions without a strong understanding of her own financial plan. Even in stable partnerships, limited participation may mean that your preferences aren’t reflected properly and risk exposures—like those mentioned above—are less likely to be taken into account during the planning process.

What women can do

The good news is that these risks are well understood and can be addressed through thoughtful financial planning.

Prioritize retirement savings—early: Maximizing retirement contributions—and taking full advantage of employer matching funds—as early as possible helps offset lower lifetime earnings. Starting early allows compound growth to do more of the heavy lifting. Age-appropriate allocations to growth-oriented investment, such as equities, can help address longevity and inflation risk.

If you have a pension, maximizing those benefits is another effective way to manage longevity risk. When pension options are limited, an option to consider may be an income annuity to help provide guaranteed lifetime income.

Plan for health care and long-term care: Because women live longer, long-term care costs may disproportionately fall on their shoulders It’s worth having conversations about long-term care sooner rather than later, as coverage gets more expensive and difficult to obtain as you age.

Make a plan for Social Security: Consider Social Security strategies that maximize retirement income. If you have a spouse, planning together can help make the most of each person’s lifetime benefits. Meanwhile, if you’re divorced or widowed, you may take advantage of meaningful Social Security benefits. For example, divorced women who were married for 10 years may claim benefits based on their ex-spouse’s benefits, and widows may be eligible for the benefits of their deceased spouse.

Take an active role in the planning: A well-crafted financial plan can address the above risks. And while women can use online tools and other resources to build a suitable plan, more than 50% would prefer to work with a financial planner who can help them achieve their goals. We encourage you to take an active role in the planning process, helping ensure that the specific challenges you might face are reflected in your plan. Active participation helps ensure that if life circumstances change, you are prepared to make informed financial decisions with confidence.

Start the conversation

Financial planning is most effective when if reflects your goals, priorities and long-term vision. If you’d like to explore strategies tailored to your situation, we’d welcome the opportunity to connect.

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¹Pew Research Center, “Gender pay gap in U.S. has narrowed slightly over 2 decades,” 2025.

²Centers for Disease Control, “National Vital Statistics Reports,” 2023.

³McKinsey Global Institute, “Tough trade-offs: How time and career choices shape the gender pay gap,” 2025.

⁴CFP Board, “Building Wealth: Insights on Women’s Aspirations & Growing Financial Power,” 2025.