Survey: Women are guessing when it comes to retirement planning

Working women’s retirement dreams include travel, spending more time with family and friends, pursuing hobbies, and volunteering.

Yet more than half say they're guessing at the magic sum they’ll need to feel financially secure in retirement, according to a new survey by the nonprofit Transamerica Center for Retirement Studies.

Based on median numbers, women workers across generations estimate they will need $500,000 to meet their goal. At the top end, about a quarter reckoned $2 million or more, and 15% of respondents estimated needing between $1 million and $2 million.

Sign up for the Mind Your Money weekly newsletter

“That guessing stat stood out to me,” Lindsey Stanberry, founder of The Purse newsletter about women and money, told Yahoo Finance.

Me too — especially considering nearly half of the women surveyed say their greatest retirement fear is outliving their savings and investments.

“This is consistent with what I've seen when interviewing women,” Stanberry said. “I ask women to share their top financial worries, and nearly all of them mention concern about having enough saved for retirement.”

Some of these women are in their 40s and have more than a million already saved for retirement, she added. “They have good, consistent savings habits and, in some cases, access to employer-sponsored retirement plans with generous matching programs — and yet still they feel unsure it will be enough.”

Learn more: Retirement savings by age — how do you compare to your peers?

Women are 'still losing'

“Nothing earth-shattering here,” Cary Carbonaro, a certified financial planner and the author of the book “Women and Wealth,” told me after she reviewed the report.

“What hasn't changed in decades: Women are less confident than men about retirement, emergency funds are lower than men’s, fewer women work with advisers, and more women are guessing about retirement,” she added.

Only 1 in 4 women have a financial strategy for retirement in the form of a written plan, and just 3 in 10 currently use a professional financial advisor, per the data.

Read more: The 7 best questions to ask your financial advisor in the new year

“What I find is the women working and hiring advisers only do so when it is raining,” Carbonaro said. “Or that's what I call it. It is death, disability, job loss, divorce. Men will hire an adviser when the sun is shining. Women have to do better at that and not think about getting help only during a crisis.”

Another red flag: These workers are dipping into their retirement savings before they retire.

According to the findings, almost 4 in 10 women workers have taken a loan and/or early withdrawal from their retirement accounts.

“Women are vulnerable to financial setbacks," said Catherine Collinson, CEO and president of Transamerica Institute. “When disaster strikes, if they don’t have adequate emergency savings or insurance protections, their options may be limited to either tapping into retirement accounts or taking on high-interest rate credit card debt.”

“For women finding themselves in this predicament, taking a loan from a retirement account might be the lesser evil because you can pay yourself back with interest,” she said.

A withdrawal from your 401(k) account is typically taxed as ordinary income. Also, you’ll pay a 10% early withdrawal penalty before age 59½, unless you meet one of the IRS exceptions. These include certain medical expenses, qualified tuition payments, and up to $10,000 for first-time homebuyers. Some employer plans, too, will allow a non-hardship withdrawal.

How to stop guessing and start planning

There are steps you can take to avoid a "spinning the wheel" approach when determining how much savings you need to confidently step out of the workforce.

Consulting with a certified financial planner or using an online calculator will help you focus on what you should actually be saving, even if it has to be a motivating goal at the moment.

Retirement calculators are widely available online and can help you get a sense of whether you’re on track. Check out AARP, Bogleheads, Fidelity, Schwab, or Vanguard to start.

What else? Get comfortable talking about it.

Avoidance runs deep, but talking about money and not being afraid to ask "stupid" questions is imperative — yet less than 2 in 10 survey respondents said they frequently discuss saving, investing, and retirement with close friends and family.

“We need to open it up and talk about it very candidly because when we do, we can probably feel a little bit better about our own personal situation and that can translate to wellness overall,” Maddy Dychtwald, author of “Ageless Aging: A Woman’s Guide to Increasing Healthspan, Brainspan, and Lifespan,” told me.

Have a question about retirement? Personal finances? Anything career-related? Click here to drop Kerry Hannon a note.

Now some advice from me:

Knowledge is power

Build into your schedule ways to learn more about personal finances and investing. Take advantage of workplace seminars if your employer offers them.

Start a money book club.

Get a small group of friends, relatives, or co-workers together to read books on investing and retirement planning. You might even ask a financial author or financial journalist to make a presentation.

Have those "money honey" talks

If you’re married or have a partner, a scheduled, candid money conversation helps you set financial goals together for the near term and for retirement.

Maximize your 2025 retirement plan contributions, if you can afford it

Those of you who were 50 or older this year, take advantage of what the Internal Revenue Service calls catch-up contributions. You have until April 15, 2026, to invest an extra $1,000 in a 2025 traditional or Roth IRA, for a total contribution of $8,000.

The standard contribution limit for a 401(k) this year for an employee is $23,500, but people 50 and older can typically invest additional contributions. You generally need to put the money in by Dec. 31.

Learn more: How to catch up on retirement savings

Be brave

Many women remain too risk averse and conservative when it comes to investing for retirement, and that isn't the best recipe for having enough to live on when you are no longer on the job. That's especially true if you're solely responsible for your finances at some point in retirement, due to divorce or the death of a spouse.

Find a trustworthy adviser. I prefer fee-only financial planners who don't make money from brokerage commissions.

Women don't need to invest differently from men. But we do need to work harder at it since we often earn less than men, live a few years longer on average, and may take time off to raise a family or care for an aging relative — missing out on raises. That reduces the amount you eventually receive from Social Security during retirement and gives you fewer years to finance a retirement plan at work and have your contributions matched by your employer.

Don’t be shy about asking for raises

Many women I know don’t go to bat for themselves when negotiating a salary for a new job or after they’re hired. That can hurt you for decades since raises are usually based on a percentage of pay.

You have the ability to do something about being paid what you deserve: Negotiate fearlessly.

Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work," and "Never Too Old to Get Rich." Follow her on Bluesky and X

Sign up for the Mind Your Money newsletter

Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more

Read the latest financial and business news from Yahoo Finance