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Closing the Retirement Gap for Working Mothers

The financial data on retirement for women reveals that they face far more challenges than men when it comes to preparing for their golden years.

Although women on average live longer and therefore require more retirement money, statistics show they typically retire with less money than men, in part because they spend their careers making less money than men.

It’s even tougher on working moms who have made childcare expenses and spending time with their children a priority for most of their adult lives. The COVID-19 pandemic further complicated the situation, requiring many mothers to leave the workforce because of inadequate childcare options or the ability to work remotely in their job.

Working moms know they face an uphill climb. When the U.S. Government Accountability Office (GAO) created 14 different focus groups of women to discuss financial issues, members of every single group had “some level of anxiety” about financial security and retirement, including the rising costs of healthcare and housing.

Data on the Retirement Gap for Working Mothers

Emily Oster, a professor of economics at Brown University, writes about money and parenting. She also conducts research on the different financial outcomes for women, including working mothers.

For example, Oster reports on her website that women not only retire with less money than men, but they also know less about saving for the future. Approximately 32% say they never learned about saving for retirement, according to information on Oster’s website.

A recent report from TIAA (No. 8 on Fair360, formerly DiversityInc’s 2022 Top 50 Companies for Diversity list) delves into data related to women and retirement. Based on information gathered from a survey of 1,586 mothers, TIAA addresses a number of specific issues women encounter when it comes to closing the retirement gap.

A Lack of Awareness

The data in this area revealed that women place their children ahead of themselves, especially any consideration of future financial well-being.

For example, when considering leaving a job to stay at home with a child, a decision that can significantly reduce the amount of retirement savings a working mother accumulates, almost 20% of women reported they “didn’t think of it” when asked about the impact of the decision on retirement savings. Only a third reported giving the issue a lot of thought.

They also said that childcare costs dominated most of their labor market decisions. Perhaps most significantly, almost 33% of mothers said they never learned about retirement savings, mirroring what Oster reported.

A Lack of Action

Given the lack of awareness about the impact of parenting decisions on finances, it’s not surprising that working mothers also fall behind in taking action on retirement. The survey found that almost half of the mothers who took the survey reported having no retirement savings at all. Among the rest, only 26% said they are saving at a level where they feel comfortable, while 27% are saving but not at the level they want.

There are stark differences in the data between women of different levels of educational attainment. Only 39% of women who have no education beyond a high school diploma reported any retirement savings at all. For women with a postgraduate degree, that number reached 72%.

Mothers also feel the monthly cash flow squeeze that is increasingly experienced by millions of Americans. Almost half of the women surveyed (49%) said they had no money to put into retirement savings after paying their monthly expenses.

Lack of Support

TIAA reported that fewer working mothers have access to employee matching contributions for their 401(k) than others do. They also have limited maternity leave, with only 32% saying they have access to any type of paid maternity leave. More than 52% said they are forced to take money from savings or a 401(k) plan to pay for costs when they take maternity leave.

Why Working Mothers Aren’t Offered Higher-Paying Jobs

The gender pay gap is a big contributor to women facing a steeper climb than men when building robust retirement savings. The gap has remained fairly steady for two decades, according to the Pew Research Center. Women continue to make about 82% of what men make for the same job.

The GAO also reports that women are more likely than men to take on caregiving responsibilities for children, including leaving work to stay at home with the children. This leads to reduced retirement savings as well as fewer Social Security contributions, another factor that leads to less money in retirement.

At some companies, an unconscious bias against women — more specifically, the idea that a man can perform a job better than a woman — is behind the fact that far fewer women get promoted to higher-paying jobs, according to research cited by CNBC.

There’s one more complication for women. Data from the GAO shows that women are more likely than men to become the primary caregiver of a grandchild. Women in these situations also are more likely to be poor than the general population.

Closing the Working Mothers Retirement Gap

Closing the retirement gap for working mothers requires a focused effort. Financial education is the first place to start. Women can take steps to learn more about savings by visiting websites such as the one from Oster.

However, systematic change is needed. Financial education is woefully lacking for both women and men in the U.S. Oster and others advocate for more teaching of financial basics for all children. Women can take steps to reverse some of the issues listed above, such as failure to set aside even small amounts for retirement. These amounts can make a big difference over time.

The GAO also has recommended that Congress increase access to retirement savings plans for working mothers, improve tax incentives to save for retirement and expand Social Security benefits.

2024 Top 50 Companies


Rank 33

TIAA maintained a spot on the Top 50 list, ranking No. 33 in 2024. The company’s commitment to equity extends both to its employees and to the communities it serves through inclusive financial planning, addressing historical barriers to generational wealth accumulation.

Thasunda Brown Duckett
President and CEO

“TIAA has made diversity, equity and inclusion a cornerstone of its culture. Now more than ever, companies need to create cultures where employees can bring their true selves to work. It’s not only the right thing to do but also what’s best for the long-term health of our business.”

Natasha Radden
Senior Vice President, Chief Diversity and Talent Officer

“Our focus is to create a diverse and inclusive workplace that promotes the diversity of our people and values the inclusion of perspectives to meet the needs of an increasingly diverse participant and global client base.”

From the Company

TIAA was founded in 1918 with a single purpose – to deliver financial security in retirement. Since then, TIAA’s lifetime income solutions have delivered over $500 billion in guaranteed retirement income payments to millions of educators, healthcare professionals and others in service.

Diversity, Equity and Inclusion (DEI) are integral to who we are as a company and how we serve the financial needs of those who serve others. Alongside Corporate Social Responsibility (CSR), we address systemic issues so we can promote equity for our associates, clients and communities – because everyone deserves to be treated with respect and dignity. Our focus areas are to build a generation of diverse future leaders, enable inclusive wealth generation and make a bold community impact. These focus areas drive us to take meaningful action within our organization and the world around us.