Women live longer but aren’t saving enough for retirement. Here’s what to do if this is you

More women end up underprepared for retirement compared to men.

And in the case of lower income women, women of colour, single mothers and divorcees, the risk of poverty in retirement is higher.

This unfortunate situation is driven by two factors; women live longer than men, and they’re still paid less for their work.

Yes, this is 2025, and yes, this is still an issue. 

Complicating things, many women are reluctant to seek financial advice from an expert, and are shamed for not ‘doing better’ or ‘knowing more’ with and about their finances; which is disempowering.

To be fully prepared for retirement, however, women need to save more money and start feeling empowered about their financial choices. 

OK, so how much more money are we talking about?

In many cases, it’s going to take a doubling of savings efforts. 

In my ongoing work supporting women’s financial well-being, and in my research to write my book “Well-Heeled: The Smart Girl’s Guide to Getting Rich,” I learned that many women have been advised to earmark five to 10 per cent of their income for retirement savings. This is just not enough.

It’s more likely going to take closer to 10 to 15 per cent of gross income, saved in a combination of tax-advantaged tools like RRSPs, work pensions and TFSAs, to ensure her nest egg is adequate for retirement. 

“But, how on Earth can I double my savings with the high-cost of living!?” 

The way to pull off your increased savings plan is to ruthlessly prioritize this goal.

Cut back on unnecessary spending. Reduce spending in those flexible categories such as monthly services, subscriptions and memberships. Nix those nice-to-have expenses like lunches out, and negotiate every cost.

There’s a word for this: budgeting.

Financially secure women always budget and always pay themselves first In their budgets — then pay for everything else.

Retirement savings, therefore, happen guilt-free every payday, with the leftover going to essentials and fun.

Some women go granular with detailed budget spreadsheets, while others succeed with a more flexible approach such as reconciling your spending once a month. You’ll know your system is working if you’re able to save more.

Another way to roundup more money for retirement is to get paid what you’re worth. This means holding your boss to account for equal pay or even switching jobs.

The $10 latte factor is great inspiration to save a bit more

Imagine investing $10 a day instead of buying that double chai latte?

With compound interest and reinvested returns, that money could grow significantly over time.

Let’s say you’re 30, read this, and decide ‘no more $10-a-day lattes (or lunches or whatever)’. That simple $10 a day, invested at an average rate of return of 7.5 per cent, would give you a $610,000 nest egg at 65. 

Even if you invested half, so $5 a day, it’s still hundreds of thousands of dollars toward long-term savings.

Any online compound interest calculator can be used to run these what-if scenarios, which are highly motivating for the women I work with.

Personally, I like the calculator found on the getsmarteraboutmoney.com website.

Now, imagine layering this extra ‘latte factor’ savings onto an employer matched retirement savings plan? The more you add, the more they could match; which is effectively more free money, and a great reason to participate in these kinds of plans.

Even without an employer retirement savings program, the ‘latte factor’ principle works wonders in RRSPs and TFSAs that are invested for the long term. 

Which brings me to my next point …

Saving money isn’t enough. It needs to be well invested

I’ve found in my work that when women are empowered with financial knowledge, they are excellent savers, leaning into the power of habits to make it a part of their overall well-being.

But, to be prepared for retirement, it’s not enough to just be a good saver. The key is to get your money growing through investing in a well-diversified investment portfolio, which includes a mix of risk-appropriate stocks, bonds and funds.

Because there are thousands of investment vehicles to choose from, it can be helpful to engage an investment professional, through a robo-adviser or via a meeting with a money adviser to learn more about the differences between the typical kinds of portfolios: conservative (women retiring in five years or less); moderate (5-10 years from retirement); balanced (15-20 years from retirement); growth (20-30 years from retirement); and aggressive growth (30-40 years from retirement). 

So much is evolving in the investment field. 

A growing number of women are taking a DIY approach in piecing together their own low-cost portfolios using ETFs. Others are reaching out to robo-adviser managed products or full service financial advisers.

The key is to stay curious and learn as much as you can about investing in general. Try reaching out to other women who seem to have it all figured out and ask for advice or a referral.

Whatever investment solution you choose, it’s key to closely monitor the performance of your investments.

That means opening up your monthly statements and at least checking on the portfolio’s short- and long-term rate of return.

If the portfolio isn’t keeping up with a stock index like the S&P 500, perhaps the investment strategy needs a rethink.

If reading this has been the nudge you needed to take charge of your finances, awesome!.

A great next step is to get a financial plan prepared — even consider hiring a woman adviser.

A great plan, and adviser, will outline exactly what needs to be done to play savings catchup and get you ready for retirement.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.