It’s very hard for women to achieve early retirement. To retire early, women literally need to be twice as good as men. We’ll offer to show how wide this wage gap between genders can be, and offer three big choices women can consider to 2x their life’s ability to achieve early retirement. These big choices range from marriage, career choice, to saving decision.
Early retirement for women is virtually impossible
Early retirement for women is statistically twice as hard as it is for men. Women make less money. Women make on average 23% less than men for the same job. Women’s earning potentials also die young. A man’s income peaks at 50 while a woman’s peaks at only 35: that’s a 15-year difference! Plus, Women live 2 years longer than men: there is more to save.
Women do save a bit more than men, the wealth gap is too much to close. Men earn 60% more at their peak and do so for 15 years longer. It’s understandably difficult for women to close this gap.
Much of this wage gap can be explained by women starting to have children and quitting jobs to raise them. Although one of the worst career choices a woman can make is to have children, for men, it’s the exact opposite. However, children do not explain everything. Women who never had children from the same MBA schools earn less than their counterpart. Perhaps this is because women negotiate salaries relatively less frequently. But when women do negotiate, people trust them less and no longer want to work with them. Women just can’t win.
Big choices to consider for women to achieve early retirement?
1. Get married, and marry well: estimated to increase wealth by 50%
The reality is that we don’t live in a world of men versus women, we live in a world of families. Married women are twice as wealthy as single women not only because they get to share the wealth earned by their male (or female) counterparts, but because a family structure creates stability that then allows people to focus on things like saving money. So unless you are determined to stay single forever (and mad respect to you for making this personal choice), take finding a mate seriously: it’s not enough to land a great job, you need to also land a great partner.
While getting married can save you money, getting divorced will cost you even more. This brings us to the second point: marry well and marry once, if you can. Marrying rich is a fairy tale: it rarely works out. Unless you too come from money, marrying someone of a significantly different economic class posts all sorts of challenges that likely. Instead, find a partner who wants what you want. If you are a career woman, you’d want to marry someone who is willing to do laundry and share the burden. If you want to retire early, you’d want to find a financially responsible person who is willing to delay gratification and ruthlessly prioritize savings over material things.
2. Put half of your income into savings: estimated to increase wealth by 25% to 50%
Retirement planning for women requires radically different savings plan. Saving 50% of your income should be a source of pride, a healthy way of life.
Women on average save less than 10% of their income, not nearly enough for any sort of retirement. Our society places particularly intense pressures on women to define themselves through material purchases. Many women believe they need to spend to look good. The savviest women know that’s not the case. The savvy ones make wise decisions to spend as little as possible while looking totally presentable for every occasion. Be a savvy woman.
3. Find a career that focuses more on hard skills and less on face time: estimated to increase wealth by 25% to 50%
Women needing flexible hours during child-rearing years is the primary contributor to her career stalemate. Prominent research supports this theory and suggests that flexible hours could make for greater gender equality in the workplace. Having flexibility in your hours could mean two things: either you are completely replaceable (a service person at McDonald’s) or that you have control of your own hours (a biology researcher).
In fields like HR, marketing or client-heavy business sectors – face time is valued. These are the careers that tend NOT to provide flexibility in hours. The woman needs to meet with clients at predetermined times and often must show her face to get things done. But in STEM fields, there is often a deadline to deliver a (rather technical) project, but there is less rules around the exact working hours. It is not a surprise, then, that pharmacists and accountants are the the two fields where there is virtually no wage gap between men and women.
Keep this in mind as you develop and grow your career: worry about not only how much you make today, but how much control do you have over your own hours.