By: Binney Wietlisbach – President, Haverford Trust

While everyone has likely heard of the gender pay gap, there’s another pressing financial issue facing women that must be addressed — the gender retirement gap.

Women have made great strides in the workplace over the past several decades. They’re climbing corporate ladders, becoming successful entrepreneurs, taking up a greater share of board seats and earning more than any prior generation of women.

However, women in general are still less prepared for their retirement years than men. According to a 2019 study by Nationwide Advisory Solutions, only 62% of women have a plan to protect themselves from outliving their savings, compared to 76% of men.

This issue hits home for me particularly because of the financial challenges my mother faced. In fact, it’s a major reason I got into the business of helping people find financial security and providing women with financial literacy. Many years ago, my own mother, while familiar with the basics of personal finance and savings, sat by while a trust that was supposed to support her in her retirement years dwindled due to financial mismanagement. My mother didn’t know how to read the statements she received in the mail, didn’t have someone to ask and, therefore, had no idea what her personal financial picture really was. This is a familiar story for women of her generation, which sadly continues today. Had she been armed with the knowledge of personal finance best practices, this situation could have been completely avoided.

Today, women continue to face unique challenges that make planning for retirement more difficult than their male counterparts. These may include:

  1. Earning less on average than our male counterparts, through a combination of lower salaries or chosen career paths, makes saving today that much more difficult.
  2. The “motherhood penalty” for leaving work to spend time at home after childbirth or raising children, which in addition to the above has been estimated to lead to approximately $16,000 in lost wages for women each year.
  3. Women tend to live longer than men and pay more for health care expenses during their retirement years.

Despite these challenges, there are many aspects of our financial lives we can control when it comes to preparing for retirement. Women have much to gain from learning about what steps they can take now to put them in a better position to enjoy their golden years.

Below are a few actions women can take that can make meaningful progress in closing the gender retirement gap.

1. Find a financial advisor you trust

Financial advisors can help create a holistic picture of your financial life. Greater clarity into where your money is coming from, where it’s being spent and what’s leftover can provide powerful insights into how to best prepare for retirement. Knowing your monthly expenses can help you understand how much income you’ll need in retirement. Financial advisors can also help you consolidate debt, identify unnecessary costs and find other ways to free up additional savings. With visibility into your financial life, it becomes much easier to see where you want to go and how to get there. These professionals can help you set attainable financial goals and create a plan to take steps toward achieving them. And they will be there when the inevitable, unexpected detour happens, helping you recalculate your plan.

2. Contribute to your 401(k) or other tax-deferred retirement savings vehicles

Taking advantage of company-sponsored 401(k)s and other tax-deferred retirement savings vehicles is perhaps the most effective weapon women have against the gender retirement gap. Many companies today will match a percentage of your contributions, giving you an immediate return on the contribution, which we call “free money.” Additionally, by automatically deducting a portion of your paycheck, it makes saving much easier. Starting early is the key. Over time, compound interest and tax deferrals on top of the “free money” your employer may contribute can make a meaningful difference in the amount available to you in retirement.

3. Make time to care for yourself

Health care costs continue to skyrocket for individuals across the country, especially for people in retirement. For women, these costs on average are even higher than men. Women can expect to spend $165,000 on health care in retirement on average, compared to just $150,000 for men. The best defense against higher health care expenses later in life is to adopt a healthy lifestyle today. Making time for exercise, eating right and self-care can save thousands of dollars in retirement and lead to much better retirement years.

Clearing the gap

While there are many factors women cannot control, there are plenty of actionable steps we can take to close the gender retirement gap. By focusing on what we can control, we can create a financial plan that has a greater probability of getting us where we want to go. We hope this helps put you in the right direction for your financial future.

This content was published in partnership with Philadelphia Business Journal. To see the original article, click here.