Fair Advice for Women (and Men)


“The fair is in October!”

That was the coach’s response to one of my high school teammates when he suggested that the wind sprints everyone was being asked to run after a loss weren’t fair. He didn’t understand why the whole team was being treated that way when only a few players had made errors or failed to come through with the game on the line.

We had just lost to one of the best teams in our area. They were generally bigger, stronger, and faster than us. The home plate umpire had upset our best pitcher by not calling some close pitches as strikes, leading to him exiting the game early. One of our outfielders had misjudged a fly ball that, if caught, would have ended an inning before the other team scored several runs. And in the last inning, one of our batters missed (or ignored) a bunt signal and wound up hitting into a momentum killing double play.

While we were gasping for breath, the lesson the coach was imparting may have been lost on us. But eventually, we learned that good teams overcome adversity while bad ones look for excuses and pass the blame.

As I got older, I adopted the phrase as my own “witty” response when someone objects to some perceived injustice. I have said it to my children when they drew short straws. I’ve said it to friends that have felt victimized by life’s circumstances. I even said it so often at work that an employee once included it on a slide of my common sayings (aka “Weeksism’s”) that were used to roast me at a going away party.

So, when I saw a recent news story about how women are at a disadvantage to men when it comes to retirement savings, I could hear that old coach yelling in the back of my mind.

The Women’s “Retirement Gap”

The “Retirement Gap” is the difference in resources that women, on average, accumulate versus men for retirement. This gap can be attributed to many factors, some of which are:

  • Women earn about 20% less than men.[i]

  • Women gravitate to lower paying occupations (i.e. teaching vs engineering).[ii]

  • Women make less money for each child they bear.[iii]

While there is some evidence that women also start out making less than men in some professions, the biggest contributor to the gap seems to be the time spent outside the workforce raising children. Kids not only cost money to clothe, feed, and educate, they also cost mom about $400,000 in earnings, retirement savings, and Social Security benefits[iv].

In addition to not having as much accumulated in retirement, women tend to outlive men by about 5 years,[v] which means they have to live on less for a longer period.

It just isn’t fair!

Closing the Gap

My high school baseball team learned from our mistakes. Even though we couldn’t make ourselves as big or fast as our rival, we did focus on many small things that allowed us to overcome our shortcomings. Our pitchers learned to focus on the next pitch instead of dwelling on the last one. Our outfielders practiced taking more fly balls. And we figured out that if we missed a coach’s signal, that we wouldn’t get much playing time. All those factors contributed to us narrowing the gap and beating that same team later that season. It will take a similar approach to close the Retirement Gap.

Here are some tips for women and their partners to put into practice:

  1. Start early. When you start a job, elect to put the maximum contribution available into your retirement plan. Do it before you become accustomed to having that income and you will be less likely to miss it.

  2. Take more risk. Invest aggressively when you are young. Stocks earn more than bonds. Small, undervalued, and profitable company stocks tend to outperform others. Invest most of your retirement savings in these types of choices in your retirement plan while you have many years to recover from inevitable downturns, but also to compound the higher returns they offer over longer periods.

  3. Make spousal IRA contributions. If you are married and one spouse stays home, the tax laws allow for the non-working spouse to make an IRA contribution based upon the working spouse’s income.

  4. Save more. Increase retirement savings for the working spouse to account for the “lost” savings when the other decides to stay home to raise children.

  5. HSA. If you use a High Deductible Health Plan at your workplace, consider maxing out the contributions to a Health Savings Account. These can have the added benefit of allowing you to invest pre-tax AND grow tax-free.

  6. Catch-Up. Both partners should use “Catch-Up” contributions in your retirement plans and IRA’s if you are over age 50. This feature can allow up to $6,000 more per person to be contributed to a workplace plan such as a 401(k) or 403(b), and $1,000 more to an IRA.

  7. “Old Age Insurance”. For those approaching retirement age, the choices you make regarding when to take Social Security can have a huge impact on your retirement income. Each year you delay your initial benefit increases the benefit amount by 8% per year until age 70. Other factors such as health, age differences, and benefit amounts between spouses can complicate the decision, but start by considering what the consequences of living past age 80 may be.

While none of these tips are guaranteed to level the playing field for women any more than extra practice reps were to ensure a victory in high school, they certainly can improve the odds of narrowing the gap. With annual enrollment season getting underway at many workplaces, it is a good reminder.


If you would like to discuss your choices, get in touch.





[i] https://www.census.gov/data/tables/time-series/demo/industry-occupation/median-earnings.html

[ii] https://www.dol.gov/wb/resources/Womens_Earnings_and_the_Wage_Gap_17.pdf

[iii] https://www.jstor.org/stable/2657415

[iv] https://www.americanprogress.org/issues/women/reports/2016/04/12/135260/the-top-10-facts-about-the-gender-wage-gap/

[v] https://www.cdc.gov/nchs/data/databriefs/db293.pdf