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You’ve heard it here before: women are paid 78 cents for every dollar paid to men and this wage gap heavily impacts women of color. But what you may not realize is that the gender wage gap continues to impact women beyond their working years. We dug into the data to uncover just how dire retirement insecurity is for women, and especially women of color. Over a lifetime, the gender wage gap and caregiving-driven breaks in women’s careers deepen into a retirement income gap. With longer life expectancies than men, women have fewer resources to stretch over longer periods when they may be unable to work or more vulnerable to health complications.

Women Are Less Financially Prepared for Retirement

Our analysis of the federal Survey of Household Economics and Decision-making shows that overall, 48 percent of adults say that their retirement plans are not on track – a dismal baseline that reflects how stagnating wages and rising costs for things like housing and higher education have impacted low- and middle-income working families. Even worse, we found noticeable gaps in retirement preparedness by gender and race and ethnicity, and household structure. (Because this survey was of households, when men and women share a household their data are combined.)

About 46 percent of people with a spouse or partner said that they were not on track for retirement. That rate was only slightly worse – 49 percent – for men without a spouse or partner (whether due to divorce, a partner’s death, or simply not wanting or having a spouse or partner). But a significantly larger share of women without a spouse or partner – 56 percent – said their retirement plans weren’t on track. Households of color were even more likely to report not being on track for retirement – particularly solo Latina women and women reporting a race other than Asian, Black, or white.

These gender and racial gaps underscore that economic barriers structured by sexism and racism – not a “lack” of spouse – are why women are less prepared for retirement. All people deserve financial security throughout their lives, no matter what kind of family they have. Women who choose to be single, lose a spouse, or leave an abusive relationship need to be able to provide for themselves and their loved ones and save for retirement. Yet the data show they face high barriers to financial security.

Wage Gap and Lack of Caregiving Supports Undermine Retirement Savings

A significant portion of this gap in retirement preparedness can be attributed to factors including lower pay and lack of investment in child care and benefits like paid leave that help women stay attached to the workforce for more of their prime working years. In fact, we found that retirement plans were especially likely to be off-track in households where someone has been recently out of work due to child care or family obligations.

Women are also less likely to be eligible for a retirement plan than men, in large part due to occupational segregation and women being overrepresented in part-time jobs, and have less to save due to wage gaps, which cost women overall nearly $400,000 over a career.

Financial strains due to wage inequality and caregiving are even greater for women of color. Black women are paid 66 cents and Latina women 52 cents for every dollar paid to white, non-Hispanic men. Among family caregivers, Latina, Black and Asian American women face the greatest amounts of financial strain. Yet most workers still lack paid leave. For example, when Black women take leave, 42 percent do so without pay. This alone amounts to an estimated $3.9 billion in lost income each year. Put simply, the challenges faced by women in saving for retirement are exacerbated for women of color.

These inequities mean that a substantial share of women – particularly Black and Latina women – have very little saved for retirement. In fact, on average Latina women have just $8,600 in retirement assets and Black women just $11,200. Even looking only at adults closer to retirement age, 50 percent of women aged 55 to 66 have no retirement savings at all (versus 47 percent of their male counterparts). Among Gen Xers – now in their prime earning years – the average private retirement savings for women is more than $50,000 less than the average for men. And that average is skewed by a small number of very wealthy savers: the median Gen X woman has just $6,000 saved, compared to $13,000 for men.

Data from AARP’s 2023 Financial Security Trends Survey shows that six in ten Black and Latinx households have less than $50,000 saved for retirement, as well as one in three Asian households and more than four in ten white households.

Approaching retirement with less than $50,000 saved is financially very precarious since the average annual expenditure for individuals 65 years and older is $57,818. This average expenditure is particularly high ($60,844) from ages 65 to 74. In other words, saving less than $50,000 would likely be insufficient to cover even one year’s worth of expenses in retirement.

Women’s lower ability to save for retirement means that the guaranteed baseline of Social Security is all the more important. But the same factors that undermine women’s savings also lead to lower Social Security retirement benefits, which are based on a worker’s earnings over their lifetime.

The Importance of Fighting Discrimination and Winning Paid Leave

The retirement cliff facing too many women of color illustrates why taking action now to close the wage gap is critical to the future of our families, our communities and our economy. Strengthening our anti-discrimination laws, expanding access to affordable child care, helping lift wages in women-dominated industries in the care sector and creating pathways into higher-paying jobs through smart infrastructure investment will go a long way to closing the wage gaps that women face in their jobs. And finally enacting a national paid family and medical leave program will help women keep their jobs amid family caregiving, bolstering their earnings and Social Security benefits.

Methodological note: This analysis uses the 2022 Survey of Household Economics and Decision-making (SHED). Racial categories in this analysis exclude women who identify as Latina and/or Hispanic, who are analyzed separately. Estimates for adults who say their retirement is or is not on track include non-retired people age 18 and older, while estimates for median household retirement income include retired people age 65 and older. Individuals are included as having a spouse or partner if they reported a spouse or partner was resident in their household.

The authors thank Kate Gallagher Robbins, Sharita Gruberg, Mettabel Law and Anwesha Majumder for their contributions.