I asked TIAA’s retirement income expert Diane Garnick a few questions about the retirement savings gender gap and what women can do to help ensure they don’t outlive their income. Read the full report here.


Shelly: With gender equality becoming the norm, why do you think the retirement savings gender gap continues to persist?

Diane: We’ve certainly come a long way in terms of gender equality in the workplace. There’s no doubt that women enjoy many of the same career opportunities as men—but that doesn’t always translate to an equal-sized nest egg in retirement. Let’s imagine two college graduates, one male and one female. If they start out in the same position, at the same company, on the same salary, saving at the same rate, you’d think they would be equally well off in retirement, right? Unfortunately that isn’t always the case, because women often work fewer years and tend to receive fewer salary bumps—among other big hurdles.


“Save early and often” is a mantra I often repeat to graduates of both genders. But what you’re saying is that women need to save early, often—and also at a higher rate?

  1. Essentially. Put it this way, if a male college graduate saves 10% of his salary, a female graduate would need to save 18% to yield the same nest egg.1 And statistically, she is likely to need more money in retirement: Women not only live longer, our healthcare expenses are 11% higher.2


18% is a lot. But it only applies to the average woman. I, for instance, haven’t taken any time out to raise kids nor missed a single opportunity for a pay raise!

It’s true you’re far from average, Shelly. The average woman doesn’t actually exist, of course. These numbers need to be taken with a pinch of salt, or at least revised based on the individual path you’ve taken and the highly unique direction it’s headed.


Actually, when I was fresh out of college, I was putting even MORE than 18% into my 403(b), determined to max out the annual IRS limit. Luckily I’m frugal by nature, but for many women this would be a challenge.

You’re an inspiration to us all! I think using the maximum contribution level set by the IRS is a good target to aim for ($18,000 for 2017). It’s a relatively high limit, but let’s not forget, it only applies to workplace retirement plans. If you are taking a break from the workforce to raise kids or care for a loved one, your only retirement savings option is an IRA. The maximum for that is just $5,500 (for 2017). Considering that women work an average of 29 years3 (nine fewer than men), you can see how important it is for women to set higher savings goals for themselves while they are earning. And don’t forget, your eventual Social Security benefits will also be lower, since you aren’t paying into the system during those nine years.


What is your advice to stay-at-home moms who want to save more than the $5,500 the government currently allows taxpayers to put aside for retirement in an IRA?

Putting aside savings on top of the maximum allowed for tax-deferred savings will almost always benefit you in the long run. This is where a financial advisor can really help. He or she can look at your personal objectives and talk you through your options in terms of how and where to invest those supplemental after-tax dollars.


Even if you’re in a job where there’s no gender pay gap, and you end up working for just as many years as your male counterparts, it’s important you have just as well diversified a portfolio. Can you talk a bit about that?

The fact is that, on average, women hold more of their assets in cash than men, and exhibit a tendency to want to protect the assets they have rather than endure risk.  One of the keys to long-term investment success is the ability to take well-chosen equity risk. My advice would be, stop worrying about losing money and start worrying about running out of money. Because we generally live longer than men—and we therefore need to rely on our savings for longer—we can afford to take on higher levels of well-chosen risk.


What else can we do to successfully prepare for retirement?

One solution for covering healthcare and other essential expenses in retirement is to opt for a higher level guaranteed lifetime income in your workplace retirement plan. Women actually have an economic advantage here: When companies offer lifetime income through their retirement plans, they are now required by law to use unisex life expectancy tables (even though women live longer than men). Which means that men and women of the same age with the same savings will receive the same dollar amount each month. Taking advantage of this Supreme Court decision can help to protect you from outliving your assets in retirement. 


What are the three main takeaways today?

1) Save early, often—and beyond the “maximum” that your retirement accounts allow.

2) Given the length of time you’re likely to be retired, you can afford to allocate more of your portfolio to equities.

3) Obtain more guaranteed lifetime income to cover the basics in retirement.


Great advice, Diane! I think you’ve given us some practical tools to help build a bigger nest egg in retirement and narrow that gender gap.

My pleasure.


  1. Source: TIAA
  2. Source: “Income Insights: Gender Retirement Gap,” Diane Garnick and Kari Pinkernell, October 2016, page 9.

   3. Source: Pew Research Center May, 2014 and the Social Security Administration.