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The research is clear: female athletes are more confident and have greater self-esteem than their non-sports playing peers.1 Such character traits serve them well in virtually every facet of their lives, from academics to career building to maintaining healthy relationships.
But the personal growth that stems from playing sports also empowers young women to take control of their financial future, an often-undervalued benefit with major implications.
Why?
Working women today need every tool at their disposal to overcome the formidable challenges they still face when it comes to achieving retirement readiness.
That includes:
Lower average incomes
Competitive athletes have grit, a raw determination that is cultivated with every win, loss, and personal best. It’s a strength I witnessed first-hand in youth sports and later as a college lacrosse player. That drive to succeed can be instrumental in helping women bridge the persistent gender pay gap, too.
On average, full-time working women in the U.S. earn just 84 percent of what men are paid, even with comparable levels of experience and education. The pay gap is greater still for Black and Hispanic women.2
Former female athletes, however, may be better positioned to achieve pay parity.
According to the Women’s Sports Foundation, girls who play sports have higher grade point averages (GPAs) and higher opinions of their abilities and competencies. More than 60 percent of high school girls who have a GPA above 4.0, it found, play on a sports team. Girls who are involved in sports are also 14 percent more likely to believe they are smart enough for their dream career and 13 percent more likely to be considering a career in math and/or science, jobs that are traditionally dominated by men.3
In some cases, playing competitive sports may also help set women up for a successful career.
A 2023 survey by Deloitte found that women who played youth sports are more likely than women who did not play sports to be in leadership or management roles at work.4 And 85 percent of the female former athletes interviewed said the skills they gained while playing sports helped them reach their professional goals. Those findings are even higher among women in leadership roles (91 percent) and among women who make $100,000 or more (93 percent) per year. Of the female respondents who earn $100,000 or more annually and are in management or leadership roles, 69 percent have played competitive sports.
Women at every income level, however, can help to strengthen their financial fortress by tracking their spending and saving monthly, which may help identify opportunities to eliminate waste. They should also consider building an emergency fund worth at least 3 to 6 months of living expenses to ensure that unexpected bills or a temporary job loss don’t derail their ability to save — or worse, force them to rely on high interest credit cards which can perpetuate a cycle of debt.
Smaller retirement account balances
Lower lifetime earnings make it harder to save for future goals.
That women are also far more likely to exit the workforce early, if only temporarily, to become caregivers for their children or aging parents makes the road to financial wellness more daunting still. Fewer years in the workforce may reduce their future Social Security benefit, which is based on work history.
According to the most recent data from Bank of America, the average 401(k) account balance among men is 50 percent greater than women’s overall — $89,000 versus $59,000. (Although that gap is closing among younger generations.)5
Women who hope to maximize their cash cushion in retirement need the discipline to save aggressively and the confidence to invest for growth, an athlete’s stock-in-trade.
It bodes well that many women already exhibit a better savings discipline than men, contributing a greater percentage of their annual income to savings, on average. (Related: What women get right about retirement)
Recent Vanguard data reveal that women and men had similar participation rates in their workplace retirement saving plans overall, which included those with automatic enrollment. But in voluntary enrollment plans, women at nearly every income level were more likely than men to participate. And, when they did participate, they contributed a higher percentage of their salary to retirement savings.6
Women can potentially offset some of the retirement savings challenges they face by delaying their Social Security until at least their full retirement age, when they are entitled to collect their full benefit. Collecting benefits early will result in a permanently reduced monthly benefit. Conversely, they may be able to increase the size of their benefit for life by delaying Social Security beyond their full retirement age, an effective way to give their retirement income stream a boost.7
Longer life expectancies
Athletes keep calm under pressure. They focus on the end game – their season record – and don’t let losses shake their performance.
That mindset can be a game changer when it comes to investing, as well, which may help women counter the disproportionate risk they face of outliving their savings (commonly known as longevity risk.)
Statistically, women live nearly 5 ½ years longer than men, making it necessary to stretch their already modest retirement savings for longer. The Centers for Disease Control and Prevention reports that the average life expectancy at birth for women in the United States is now 80.2, versus 74.8 for men.8
As they age, women are also potentially more likely to incur the cost of assisted living services after their partner (and would-be caregiver) passes away, which can deplete their hard-earned savings in a hurry.
Women who invest, either through a workplace retirement account or a taxable brokerage account, already demonstrate impressive resilience in the face of market turbulence.
Research by Fidelity Investments reveals that women are more likely to maintain their asset allocation and remain diversified when stocks become volatile, which may increase their portfolio returns over time. By contrast, men more often attempt to time the market based on economic trends, which historically has been shown to undermine long-term returns.9 (Related: What women get right in investing)
Fidelity further found that female investors outperform male investors by an average of 40 basis points, or 0.4 percent by deploying a buy-and-hold strategy, which adds up over time. Using average workplace savings rates and a hypothetical salary of $50,000, women who start investing at age 22 would have $276,000 (or 15.4 percent) more saved by age 67 than their male peers.
Some of the most effective strategies for mitigating longevity risk include:
- Retiring later so you can save more.
- Working part-time during retirement.
- Funding a health savings account (where available) for future health care expenses.
- Using financial products including annuities that may provide a guaranteed income stream for life.
For many women, financial wellness can be harder to achieve. Harder, but certainly not impossible. With careful planning and preparation, women at every income level can overcome challenges, build confidence, and eliminate fear — which is every bit as true in sports as it is in money management.
And that’s a win we can all applaud.
Discover more from MassMutual …
7 steps to women's financial empowerment
5 reasons why women should be financially selfish
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1 Women’s Sports Foundation, “Teen Sport in America, Part II: Her Participation Matter,” 2020.
2 U.S. Bureau of Labor Statistics, “Current Population Survey, annual averages,” 2022.
3 Women’s Sports Foundation, ”The 2023 Girls’ Index by ROX,” 2023.
4 Deloitte “Deloitte: 85% of Women Surveyed Who Played Sports Say It’s Important to Their Career Success,” Sept. 19, 2023.
5 Bank of America , “BofA Data Finds Women’s Average 401(k) Account Balance Exceeds Women’s by 50%,” June 28. 2023.
6 Vanguard, Comparing the saving behaviors of women and men in DC plans,” 2021.
7 Social Security Administration, “Retirement Benefits,” 2024.
8 Centers for Disease Control and Prevention, “NVSS Vital Statistics Rapid Release,” November 2023.
9 Fidelity Investments, “2021 Women and Investing Study.” Who’s the Better Investor: Men or Women?”