There's good news and bad news about how and what women save for retirement.

The good news is that a majority of women tend to save more than men -- some 7% of their earnings, on average, according to an ADP Research Institute report, whereas a majority of men saved an average of 6.4%. The bad news is that while women appear to be saving more, they're ending up with less money in retirement than their male counterparts.

How can this be the case? A series of factors that affect women seems to be driving down the end result of their career savings.

Understanding these factors, and taking steps to counteract them, will be critical in coming years for female retirees. So let's look at the retirement gender gap -- from its size to its likely causes and what women can do to ensure they're not caught in it when they reach their golden years.

Measuring the gap
The statistics are not exactly stacked in women's favor when it comes to retirement and savings. While women enroll in 401(k) plans at a higher rate than men -- about 79% versus 78% -- women end up with less in savings at the end of their careers.

Consider recent numbers to that effect. In 2012, men had an average 401(k) balance of $100,000, according to an Aon Hewitt study. Among women in the report, the average balance was $53,900. On top of that, female retirees face higher expenses in some categories, and certain circumstances of women's lives can pose challenges as well:

  • Women tend to live longer than men, or so says recent Society of Actuaries research: 31% of women who are 65 years old, in 2014, are expected to live to 90, while only 20% of men are expected to reach that age. Thus women tend to have longer retirements and therefore require more savings and Social Security income to see them through.
  • Long-term health care for women often lasts longer (and therefore costs more) than it does for men. Treatment of this kind accounts for some 3.7 years of women's lives, as compared to 2.2 years for men.
  • Prior to retirement, women still tend to be paid less than men -- some 23% less, according to U.S. Census Bureau numbers. Of course, making less means saving less over time.
  • Some experts view life events during a woman's career as potentially detrimental to her retirement savings. For example, if a woman leaves work to raise children, she is cycling in and out of the job market. If this occurs several times, that can further prevent her from moving upward on the salary ladder and making consistent 401(k) contributions. Leaving and reentering the job market used to pose a threat to pension potential as well, but pensions are increasingly rare in private-sector work.

So what can women do to mitigate these disadvantages? Strategies abound, but becoming more aggressive about savings seems the clearest route to take.

Closing the gap
Approaching the issue of women and retirement savings, according to Robert Massa, director of retirement for Ascende Wealth Advisers, is largely about knowledge.

"The number one thing is financial-wellness education," says Massa. "Women need to be educated to save even more than their male counterparts."

That can mean a number of things, but here's a shortlist of retirement-saving rules every woman should know:

  • This basic rule applies to both men and women: Save at least 10% for retirement, cut everywhere you can -- e.g., brew your own coffee, pack your own lunch, etc. -- and trim the buying of luxury items from your personal financial spreadsheet.
  • Women should set up their 401(k) so that it automatically increases their contribution rate by at least 1% every year. To buffer against the impact this can have on income, coordinate the increase to occur at the same time as an expected raise. If September brings an annual 3% pay hike, add the 1% at that point; this will lessen the sting of reduced take-home pay.
  • For some investors, a self-directed retirement plan can help. Bringing in a wider range of investments -- real estate, precious metals, commodities, and the like -- can augment a woman's (or any investor's) portfolio in ways that make it more diverse and potentially more lucrative.

Finally, women should seek a financial advisor who can speak specifically about the factors affecting women in the workforce and in retirement. Almost any advisor will focus on savings, of course, but female workers need someone who can help them not only to accumulate, but to maximize what they save.

How to get even more income during retirement
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