On aging, pop star Rihanna said, "When I see myself as an old woman, I just think about being happy. And hopefully, I'll still be fly." Rihanna can worry about being fly while the rest of us focus on more practical matters -- like having the means for a decent retirement.

According to an Aegon report on retirement, only 21% of working women globally believe their savings are on track to generate the income they'll need in retirement. Aegon ranks retirement readiness with a proprietary scale ranging from zero to 10. Globally, women score 5.8 on that scale -- a number Aegon rates as low.

Women in the U.S. are slightly more prepared, with a score of 6.1. While these numbers have likely improved globally and domestically from Aegon's 2014 report, women clearly have more work to do.

Woman celebrating

Image Source: Getty Images.

Planning for retirement is challenging for all genders, but women have extra hurdles to overcome:

  1. Women make less money than men. According to the Bureau of Labor Statistics data from the fourth quarter of 2019, the median earnings of women were 82.5% of men's median earnings. Said another way, women earned $0.825 for every $1 men earned.
  2. Women live longer than men. The Social Security Administration estimates that the average woman who turned 65 in 2019 will live to be 86.5 years old. A man of the same age will live, on average, to age 84. A longer lifespan stretches a woman's finances in two ways. She has to cover living expenses for an extra 2 1/2 years, on average, and spend more on medical expenses. The American Association for Long-Term Care reports that senior women spend twice as many years in a disabled state relative to men. And women comprise 70% of nursing home residents.
  3. Women can work fewer years than men. Women are more likely than men to take time away from the workforce for parental leave. That reduces their lifetime earnings and savings momentum.

Ladies, those trends mean it's critical to plan early for retirement. You can start overcoming the retirement gender gap now with these four action steps.

1. Save early and often

Experts recommend saving 15% of your income for retirement as soon as you start working full-time. And the math supports this approach.

Say you make $40,000 annually at your first job. A 15% retirement contribution would equate to saving $500 monthly. Do that for 40 years and you'll have $1.3 million on hand before taxes. That assumes your future pay increases move in step with inflation and your savings earn 7% annually. The 7% figure is in line with the stock market's long-term average growth.

But that nest egg will be substantially smaller if:

  • You take time off to start a family.
  • You decide to work part-time or leave the workforce temporarily to care for your kids or another family member.
  • You make a lateral career move to balance your family and work responsibilities.
  • You wait until you're five or 10 years into your career before you start saving.

The solution? Save as much as you can, as early as you can. Even if it's only 5% of your income today, make it a habit now. Then raise that percentage every time your income increases.

2. Study investing

According to the Aegeon report, only 23% of women globally could correctly answer the "Big Three" financial literacy questions. These questions, developed by Professor Annamaria Lusardi and Professor Olivia Mitchell of the Wharton School, have been used in multiple worldwide studies on financial literacy. You can test yourself on the Global Financial Literacy Excellence Center website.

An understanding of basic financial concepts, including compound interest, inflation, and diversification, will help you plan for retirement and make more informed financial decisions. If you need to get the basics down, check out The Motley Fool's resources on personal finance. There are also other websites that can help, including the free Personal Finance course from Purdue University on edX.org and Udemy's free online course in personal finance.

3. Live a healthy lifestyle

By some estimates, you'll spend $15,000 more than men on out-of-pocket healthcare expenses in retirement. According to the CDC, chronic diseases are the leading drivers of healthcare costs in America today. And many of those diseases are caused by just four behaviors: smoking, poor diet, lack of exercise, and overindulgence in alcohol.

Stay away from the smokes, maintain a healthy weight, eat your fruits and veggies, and exercise. It's one way to hedge against big medical bills in the future.

4. Have a retirement plan

It's much easier to achieve a goal when you have a plan. Start by defining how much you can save today and what steps you can take to increase that amount. Those steps might involve:

  • Budgeting to streamline your living expenses
  • Paying off revolving debt
  • Capitalizing on employer-match contributions
  • Banking your future raises
  • Starting up a side hustle

As you gain savings momentum, you can get more detailed with your retirement plan. You could, for example, look up your estimated future Social Security benefits at My Social Security and compare that to your living expenses. For most people, Social Security works out to be about 40% of your pre-retirement income. And that means your retirement savings would have to generate the other 60%.

You can do a rough calculation to determine the savings you'll need to generate that income. Start with the monthly income required to supplement your Social Security and multiply that number by 12. Then, divide the result by 4.5%. The answer is, roughly, your target savings goal.

The 4.5% comes from a guideline on how much you can safely withdraw from your retirement savings each year. Normally, you'd multiply your savings balance by 4.5% to calculate your annual income. Here, we're flipping the equation over and dividing, in order to calculate your total savings target from your desired annual income.

There are several assumptions baked into that 4.5%, but you can use it for early, long-term planning. Think of it as a benchmark to assess whether you're on track for a comfortable retirement.

Overcome those hurdles, ladies

Women may have a bumpier road to retirement, but it's nothing we can't handle. Here's what it takes: Saving, learning, being good to yourself, and planning. Once you've covered those bases, go ahead and focus on being fly -- if that suits you.