Why Investing for Retirement is So Important for Women (and How To Do It) 

Hey everyone! Michelle speaking for a moment. Today, I’d like to introduce you to my friend Amanda Holden. She runs one of my favorite financial blogs – Dumpster Dog. Below is a guest post from her on why investing for retirement is important for women – and how you can start. Enjoy! Play along with…

Michelle Schroeder-Gardner

Last Updated: April 21, 2024

Disclosure: This post may contain affiliate links, meaning if you decide to make a purchase via my links, I may earn a commission at no additional cost to you. See my disclosure for more info.

Hey everyone! Michelle speaking for a moment. Today, I’d like to introduce you to my friend Amanda Holden. She runs one of my favorite financial blogs – Dumpster Dog. Below is a guest post from her on why investing for retirement is important for women – and how you can start. Enjoy!

Play along with me for a moment: Imagine a deliciously styled woman in her 70s.

She is having a sip of her morning espresso at a sidewalk café in Paris. She’s perusing a big, beautiful novel alongside her (much younger) Parisian lover, who is bringing her a third croissant for before 10 am (because why not).   

This woman is you.

Or at least, this woman could be you.

Whether or not your retirement dream includes croissants and a Parisian lover, you’re going to need to save and invest to make it happen.

We’re so accustomed to thinking about retirement in terms of an age—age 65—when in reality, retirement is an amount of money saved.

Because young people will not have access to the pension plans of our parents and grandparents, retirement is entirely our responsibility.

After spending six years workin’ in a fancy investment management job, I quit.

Helping the rich get richer just wasn’t going to be “it” for me. So, I created my own business, called Invested Development (Invested Development is great for beginners and for those looking to step up their investing game. My favorite part of this work is that “ah-hah moment” when students realize that investing is absolutely within their capacity.

Part of this work is addressing the specific hurdles that women face and finding solutions to those problems so that my students can live out their Golden Years in style.

Here are four reasons women need to save and invest for retirement—and how to do it.

1. Retirement is the single biggest lifetime expense for everyone, not just women.

Can we real-talk for a hot minute? It’s hard as hell to get motivated to save for retirement. Retirement is so frickin’ far away and you’ve likely got more immediate financial goals you’d like to achieve, like a down payment for a home or building a luxury palace for your collection of rescued street cats.

But, here’s the rub: Retirement will likely be the single-biggest expense in your lifetime. That’s right: Bigger than a house (at least, for most of us), and bigger than kid’s college. Take a step back, and simply think about what retirement is: You’re living for 20 or 30 years with no working salary.

Ask yourself: How much money do you need to spend in one, single year? How about for twenty or thirty years?

Without getting too caught up in the numbers, you get the idea: That’s a heckuva lot of money to save. Saving money is going to be the foundation to achieving retirement—but investing is the secret sauce.

2. Women live longer than men.

The job of saving and investing for retirement is already big. And for women, it will be even bigger.

In 2019, women have a life expectancy of 81.6, while the average for men is 76.9. That’s nearly five more years to account for. And the tough truth is—these years aren’t usually cheap or easy or healthy.

This means that women need to plan to be alive for longer than men, which means they need more money for retirement. And really, we should all plan to live to be at least 90 or even 100.

The worst thing you can do is make a plan that assumes you’ll live to be 81.6, and then live to be 100 with nothing in the bank. (This is especially important as life expectancies are expected to rise over the next several decades.)

3. Women need their own money.

Hey! Would you like to feel very angry right now? Well then allow me to introduce you to: The National Institute on Retirement Security!

Their data shows us year after year that women are significantly more likely to live in poverty than men in retirement, and it’s worse for women of color and single women. Any of us could be single, divorced, or widowed. I’m still single IF YOU CAN BELIEVE IT!

It’s rare that life ends up the way that we expect it to.

Planning for a scenario where no one gets sick and no one gets divorced is more than just dumb, it’s dangerous—especially for those of us living in countries with waning social safety nets.

We all know, in theory, that a partner is not financial plan; the hard part is making a plan into reality and doing the work now, and not waiting until disaster or heartbreak strikes.

(Because really, I can think of no worse time to learn about Modern Portfolio Theory, expense ratios, AND THE DAMN BANK PASSWORD than after a messy divorce or the unexpected death of a spouse.)

4. Women Earn Less Than Men

Think of what investing is: Investing is using your money to make even more money.

That’s right, ladies: Let’s make money do some of the heavy lifting around here! Putting our money to work is especially important for women, who are likely to earn less than men over the course of a lifetime. Women will have less money to work with, making it critical that we make the most of the money we do have.

I do not think this is fair.

My absolute first choice would be to close this wage and opportunity gaps and for moms to have support at work. While we are working towards the cultural shift and legislative changes necessary to leveling the playing field for women, women must work within the system we’ve got.

And that means learning about investing and prioritizing her future self, even when it’s so hard.

How to Invest for Retirement

Your first step is to understand your options for retirement accounts. Where should your investments go?

Are you already covered by workplace retirement account, like a 401(k) or 403(b)? Or are you self-employed?

If so, that you’ll need to open your own at a brokerage bank of your choosing—think Fidelity or Charles Schwab. Depending on your needs, you could open a Roth IRA, SEP IRA, and/or Solo 401(k).

Next, you’ll have to decide how to invest within your retirement account.

A 401(k) is not an investment—a 401(k) holds investments. Just like your checking account holds cash, but a 401(k) holds cash, stocks, mutual funds, and so on. You can think of your 401(k) or Roth IRA as a glorified adult Caboodles (with special tax treatment)—it just holds your investments.

The treasures held inside are the investments.

Many people will opt for a mix of stocks and bonds appropriate to their goals and risk tolerance. You may find it easiest to invest in stocks and bonds using mutual funds. A mutual fund bundles together some other investment type—you can think of them as big ol’ suitcases. And just like a suitcase, what is packed inside is the most important part, and will say a lot about the type of trip you’re about to take.

Many money experts prefer index mutual funds or index ETFs which are funds that aim to return the average of whatever market they “mimic,” with very low fees. Basically, you’re just along for the ride.

No matter which strategy you choose, you’ll need to minimize what you pay in fees. Any fees you pay to an advisor, plan administrator, or broker, are fees that will come directly from your potential investment returns—so you’d better be damn certain of the value you get out of that service. Remember, the goal here is to make you rich, not to fund some overpaid mutual fund manager’s Viagra-blue sportscar.

Finally, Become Confident in Your Saving and Investing Plan

Are you ready to learn how to invest, make the most of your money, and make your badass granny dreams a reality?

Take Invested Development, which is a live, virtual, four-part Investing 101 course taught by me. (That’s right, you can take the class from the comfort of your home—popcorn, sweatpants, greasy topknot and all!) I’m committed to helping my students learn by making them laugh and providing a judgment-free place to ask questions. You will walk away with a plan of action you’re confident in.

Feeling in charge of your money and investments: It’s a powerful place for a woman to be. 

And often, learning requires the right teacher: I’m a writer and educator specializing in teaching women how to invest. Through my business, Invested Development, I’ve taught thousands of women to invest, revolutionizing what they think is possible for themselves and their financial futures. I take women who are unsure of their knowledge and turn them into confident, wealth-building badasses. 

I also write a blog called The Dumpster Dog Blog, which has been nominated for Money Blog of the Year and Women’s Money Blog of the Year for two years running.

Are you saving for retirement? Why or why not?

Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. Love this! Investing is SO important, and women should not put off learning about it! I stumbled across this blog during an internship 2 years ago, and once I got a full time salary I started saving as much money as possible in order to make early retirement a reality for myself.

  2. Mrs. Bunny-Hops

    Great article and great point on women living longer than their male counterparts! Articles encouraging women to invest are needed. I feel like fellow women often rely on the idea that social security and their pension (if they even have one) will carry them through retirement. But most people’s social security checks are less than $20k – hardly enough to survive on.