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Women Business Owners Face Unique Challenges in Saving for Retirement

July 30, 2019

Women who own or lead businesses face a number of unique challenges when it comes to saving for a secure retirement. This was one of the main findings in our 2019 Retirement Gap report. The report revealed that women who support dependents not only struggle to reinvest in their business, but 20% are not saving for retirement at all. While male business owners did report having to choose between reinvesting in their business and saving for retirement, none of them mentioned difficulties supporting dependents while saving for retirement.

Choosing between saving for retirement and reinvesting in the business

Most female entrepreneurs find it almost impossible to raise financing for their businesses from external sources which means they have to rely on reinvesting funds that the business generates. This often means there are no funds available for retirement savings.  Women-owned businesses, for example, receive just 7% of venture capital investment money and have a loan approval rate 15% to 20% less than men.

It’s even more challenging for minority women entrepreneurs. Black women own 1.5 million businesses in America that generate about $44 billion per year. However, black women obtain just 0.2% of venture capital investment dollars.

There is much anecdotal evidence to suggest that venture firms are extremely unlikely to invest in a company headed by a woman who is pregnant.

As reported in The Cut, a former healthcare startup founder who was 8 months pregnant while meeting with potential investors was told point-blank they would never invest in a pregnant woman. Four days before she gave birth, she was asked by an investor how much maternity leave she was taking. Her answer was she was planning on taking one week (this was her second child, she hadn’t taken any for her first). The response was, “I guess you’re not going to be a very good mother, then.” The dilemma was that if she said she was going to take tons of time off, he would have said she was a terrible business leader.

Supporting dependents trumps saving for retirement

Women are still the primary caregivers whether we're talking about children or aging parents. A 2015 study indicated that the primary reason American women start businesses is to accommodate work while tending to their family needs. Considering that 88% of women-owned businesses generate less than $100,000 in revenue, it is not surprising that female entrepreneurs who support dependents find it challenging to save for retirement.  

“The biggest obstacle that's limiting me from saving more for retirement is the expenses associated with raising two girls who are 2 and 7 years old,” said Yashieka S Anglin, owner of Washington DC-based Anglin Consulting Group for the past 8 years.  Anglin, a single mother, said almost 80% of her income goes to food, tutors, after school activities, childcare, clothing, and medical care for her children. 

Teresa Carew, CEO of On Safari Foods, a Seattle-based catering company said ensuring that her three children could graduate from college debt-free trumped saving for retirement. “Now that they have all graduated, I am once again able to prioritize my own financial future,” she said.

Let’s shine a light on the retirement gap

At Leading Retirement Solutions, we are concerned about helping women business owners and women business leaders prepare for a secure retirement. However, we have noticed that while there are plenty of ongoing conversations about the current financial affairs of women, including the pay gap, there is little conversation about the long-term effect…the retirement savings gap.

“Women business owners and leaders still trail woefully behind their male counterparts when it comes to retirement savings. For example, on average, women’s median retirement income is only 58% of men’s median retirement income,” said Kirsten Curry, CEO of LRS. “That’s why we are leading the retirement preparedness conversation with and for women business owners and leaders. We are tackling the retirement preparedness gap with data-driven financial and saving solutions. Most importantly, we want women business owners and leaders to feel financially empowered; they are centers of influence and have immense opportunity to help their employees do the same,” she said.

Tips to combat the retirement gap

In order to help combat the retirement savings gap, we’ve developed a few tips for both women business owners and women in general:

For Women in General:
  • Understand how much you can spend and should save to reach your retirement goals.
    • Speak with colleagues about what they’re doing to save for retirement.
    • Speak with a financial advisor.
    • Read our study, and others like it, to see how you compare to your peers.
    • Understand how to maximize tax deductions by reviewing your savings with a professional.
  • Consider retirement benefits when evaluating employment opportunities.
    • If your employer matches, contribute to the limit when possible.
    • If you will be supporting dependents, seek creative work opportunities that lower expenses and career gaps such as working remotely.
If you’re a Business Owner or Leader:
  • Offer lower cost work options for employees.
    • This includes the ability to work from home or have a flexible work schedule to negate career gaps for supporting dependents.
    • Allow workers to phase into retirement by offering flexible work arrangements and allowing for a transition from full-time to part-time and/or working in different capacities.
  • Provide saving and investing education that is easy to understand, easy to access, and meets the needs of employees.
    • Be aware of tax credits and deductions associated with retirement plans.
    • Identify and promote trustworthy sources for women to seek education and advice.

The 2019 Retirement Gap Report offers many more insights into differences between the way women and men business owners and leaders save for retirement.  Get the full report by following the button below:


At LRS, we are leading the retirement preparedness conversation with and for women business owners and leaders. We are tackling the retirement preparedness gap with data driven saving solutions. Most importantly, we want women business owners and leaders to feel financially empowered; they are centers of influence and have immense opportunity to help their employees do the same. For tips on growing your business as a female entrepreneur, check out our friends over at Business Credit Cards!

If you'd like to contribute to this year's Retirement Gap study you can take our survey here!


For more tips and information regarding retirement plans, contact us.

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The 2nd Annual Retirement Gap Report Reveals Women Business Owners Are Falling Behind in Retirement Savings

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This piece is part of our ongoing Retirement Gap research. For more information you can find our most recent study by following the link below.

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