6 Things That Cost Women More

Retirement

Good news: Women are expected to live longer than ever before. Bad news: A longer life requires a bigger nest egg.

According to the Centers for Disease Control and Prevention, for babies born in 2014, females will outlive males by nearly five years—a life expectancy of 81.1 years for women and 76.5 years for men. Those extra years at the end of life can be particularly costly and will greatly affect retirement savings plans. "When you live longer, you'll likely run into medical issues that need to be taken into account as part of your living expenses," says Nicole Mayer, financial adviser with RPG Life Transition Specialists, in Riverwoods, Ill. "So certainly saving more for retirement for a female is important."

How to spend less

There's no getting around the need for a bigger nest egg to cover your longer life span, but you can take steps to avoid shortchanging yourself in retirement. If you're married, boost your survivor payouts from your spouse's pension and Social Security benefits. And married or not, maximize your own retirement savings throughout your career—by putting extra emphasis on retirement benefits when evaluating new jobs, making catch-up contributions once you turn 50, and more.

• SEE ALSO: 9 Smart Retirement Strategies for Women

Cars

More good news: Ladies are closing the car-cost gap, at least on the younger end of the age spectrum. But women over age 65 continue to pay significantly more for cars than buyers of any other demographic.

In a 1995 study in which actors negotiated new-car purchases with unwitting dealers, economists Ian Ayres and Peter Siegelman showed that white males were routinely quoted lower prices than black or female test buyers. Nearly two decades later, a new study analyzing more than 10 million new-car sales in the U.S. and Canada between 2002 and 2009 indicates that men and women between the ages of 25 and 30 pay nearly equal prices for the same car type. Unfortunately, after age 30, a gap develops between genders, with women paying increasingly more than men for cars. Women age 70 and older tend to pay the highest prices, $236 more on average than men between age 30 and 35, who pay the lowest prices.

What causes this price drift with age? "One popular theory is that older people don't research as much," says economist Ambarish Chandra, co-author of this study along with Sumeet Gulati and James Sallee.

How to spend less

Before you visit the dealership, use sites such as Edmunds.com, KBB.com or Truecar.com to compare actual prices paid by other buyers so you can negotiate for the best new-car deal. Or consider a car-buying service, which is ideal for people who simply hate to haggle. You can also buy a used car online to skip the negotiating process.

Health Care

• Women spend, on average, $1,136 out of pocket on health care per year, or 35.5% more than men ($838 per person), according to 2010 data from the Centers for Medicare & Medicaid Services. Younger women tend to face the biggest bills. Women between ages 19 and 44 spend 54.2% more out of pocket on health care than men of the same age, mainly due to the high cost of bearing kids. But even child-free women are typically burdened with greater health care demands and costs—for example, for annual gynecological exams, birth control and over-the-counter products such as tampons (plus the tampon tax). Longer lifespans for women will mean more years paying more for health care.
• SEE ALSO: 50 Ways to Cut Your Health Care Costs

How to spend less

You can move to a slowly growing list of places that does not tax tampons as a "luxury good" (which includes Minnesota, Pennsylvania, New Jersey, New York, Massachusetts and Maryland). Otherwise, take advantage of flexible spending accounts and health savings accounts when possible, to save on taxes. You can also trim spending with strategies as simple as staying in your insurer's network or switching to generic drugs.

Personal Care

The costs of daily care add up—and more so for women. For example, a 2011 study, "The Cost of Doing Femininity," found that men's deodorant costs just $1.15 per ounce while women's deodorant costs $1.44 per ounce. Razors for men are $2.67 each; for women, $3.00 each. Even President Obama has publicly lamented the inequity of dry cleaning: It costs an average $2.06 to clean a man's shirt and $3.95 for a woman's shirt.

Such price differences are not always due to discrimination. Products for men and women are produced and marketed differently. But those differences point to a bigger issue. "It simply costs women more to perform the culturally expected functions of femininity than for men to match up with cultural expectations of masculinity," says sociologist Nicholas Guittar, co-author of the study.

How to spend less

To affect the bigger picture, talk to your dry cleaner or other service provider who practices gendered pricing. "It may not impact that one interaction, but an increased cultural dialogue holds a lot of value," says Guittar.

In the meantime, stock up for less at drugstores and mass retailers such as Target and Walmart. Keep in mind that store brand items can be much cheaper while offering similar quality. Also, you may be able to find better deals on a retailer's site than in its stores, so be sure to check online, too. Or simply buy gender-neutral products or the cheaper men's products.

But before you opt to skimp too much on personal care, remember that it is an investment of sorts—especially for women. A recent study by sociologist Jaclyn Wong and Andrew Penner showed that good grooming (as well as attractiveness) is correlated to higher incomes. In other words, paying attention to your clothing, hair and makeup can actually pay off. For example, the study showed that a well-groomed woman would earn about $6,000 more annually than an averagely groomed woman (of equal attractiveness).

Annuities

Women's longevity, once again, wears down their wallets when it comes to certain types of annuities.

Monthly payouts for immediate single-life annuities are based in part on life expectancy. Because women tend to live longer, they must invest much more to get the same monthly annuity payout that a man would. For example, according to estimates from immediateannuities.com, a 65-year-old man from Virginia can purchase an annuity that will pay him $2,000 a month for the rest of his life for about $360,000. A Virginia woman of the same age would need to pay more than $400,000 for the same annuity.

How to spend less

• For equal payouts, you can opt to set a defined schedule. For example, a 65-year-old Virginia resident can buy an annuity that will pay $2,000 a month for ten years for about $222,000, regardless of gender. If you outlive those payments, you can purchase another annuity later. (If you don't, the money goes to a beneficiary as scheduled.) Unfortunately, in the long run (should you be so lucky), this strategy of building an annuity ladder may wind up costing you more. But an upside to laddering: annuities purchased later may come with bigger payouts if interest rates rise.
• SEE ALSO: Add an Annuity to Your Retirement-Income Mix

Long-Term-Care Insurance

• Most long-term-care insurers charge single women about 40% to 60% more than single men for new policies, according to the American Association for Long-Term Care Insurance. The reason for such a drastic price disparity is that women tend to live longer and make more claims than men. For example, Genworth—the first big insurer to introduce gendered pricing for long-term-care insurance—estimates that a 55-year-old single man from Colorado would pay an annual premium of about $1,725 for a policy with a $150 daily benefit for three years. A single woman of the same age would face an annual premium of nearly $2,113 for the same policy in Colorado.

How to spend less

You can generally avoid the extra charge if you buy a policy as a couple. If the Colorado man and woman cited above bought the same plan together, they'd each pay about $1,300 a year. Married or single, you should check whether your employer offers long-term-care coverage; insurers still charge men and women the same amount for plans purchased through an employer. See Options for Covering Long-Term-Care Costs.