The way women approach life can affect how they do financially—both during their working years and in retirement.

And a new series of white papers from Bank of America Merrill Lynch is highlighting the challenges presented by those different life paths. The first, “Women and Life-Defining Financial Decisions,” focuses on how different aspects of women’s lives can have an impact on their financial security long term.

Among those aspects are differences due to gender—career earnings, lifespans and parenting situations all affect women differently than men—career decisions, such as changing jobs or taking time off to be a caregiver, which can have an outsize effect on women’s retirement security; and relationships and family, in which a decision made by one partner will influence the other partner’s financial health, as well as that of the whole family.

Other matters, such as homeownership, debt, caregiving and retirement issues unique to women are also explored.

The white paper also offers tips for ways to increase financial security, including such typical suggestions as to start saving early, before one's late 20s, ideally; starting an IRA if one's employer doesn't offer a retirement plan; considering the financial effects of whether to take on a caregiver role; and not taking on credit card debt.

It’s already pretty well known that women will need more money in retirement than men, since they live longer, usually make substantially less, and are more likely to need extended health care in their senior years—with no one around to care for them.

Yet lower earnings for women not only amount to an average shortfall of $300,000, meaning their pension benefits and/or 401(k) balances are lower than men’s, those benefits mean that women’s median retirement income is only 58 percent that of men’s.

Women are also far more likely to be single parents struggling to get by; of approximately 12 million single-parent families, more than 80 percent are headed by single mothers. That puts retirement savings pretty low on the priority list for women already struggling to meet expenses.

And at the other end of life, only 19 percent of women over the age of 85 are likely to have a living spouse—meaning that if they need care, they’ll have to pay for the caregiver.

On the other hand, men can usually count on their wives to serve as caregivers for at least part of the time that such care is needed.

Instant Insights /

Women's life decisions directly affect retirement readiness

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