TIAA says that women face five challenges when it comes to ensuring they will have enough income to provide for a safe retirement. Those changes are:

1. Fewer Working Years: Women average just 29 years in the workforce versus 38 years for men. The difference is due to time taken off to care for children and, to a lesser extent, to care for elderly parents. As a result, a greater percentage of salary must be saved by women during their working years to account for years when no savings contributions are made.

2. Lower Pay: In 2015, professional women earned 28% less than professional men. The lower pay restricts the ability to save more. To the extent that women can save more, they should. Saving up to the annual maximum limits of retirement accounts and contributing additional money to supplemental vehicles (e.g., a traditional brokerage account) will help to offset non-working years when no new contributions to savings are made.

3. Greater Risk Aversion: Women tend to maintain higher cash allocations and lower stock and mutual fund allocations then men do. These more conservative allocations compound the problems caused by fewer years of contributions to savings by reducing the rate at which savings grow.

4. Longer Lifespans: Women age 65 outlive men of a similar age by 2.5 years. This difference overshadows the fact that, on average, husbands are 2.1 years older than their wives. In situations where the wife outlives her husband, Social Security Administration data shows women living an additional 11.5 years following the death of their spouses. During this period, housing costs are not shared and the extra income from a spouse (e.g., Social Security benefits paid to two people) is lost.

5. Health Care Costs Are Higher: The Department of Health and Human Services projects women will spend $19,558 on health care once they turn 65, versus $18,251 for men. If an employer offers a lifetime income plan such as an annuity, women should consider it. The unisex life expectancy tables employers are required to use result in women receiving more income per dollar than they would find by purchasing a contract on the open market.

Source: “Income Insights: Gender Retirement Gap,” Diane Garnick, TIAA, October 2016.