Women and Retirement: What to Know

It’s important for women to have a financial plan in place for their golden years. According to our recent research, a large percentage of women do not feel confident about their retirement planning. To be prepared, there are several roadblocks women must navigate in order to retire comfortably.

Longer Life Expectancy

Most women outlive men by two or three years, so they need to have more money to cover their retirement. This means they typically have less money saved up. One in four 65-year-olds also make it past the age of 90, so make sure you have a plan that accounts for longevity and allows you to save more. You want to make your retirement funds last.

Gender Pay Gap

In order to save enough, you must earn enough. Unfortunately, women currently earn 80 cents for every dollar a man earns. As you can imagine, this is a problem when it comes to women’s retirement savings. Legally, women are entitled to the same amount of pay as men for doing the same work. If you are earning less than you deserve, discuss your salary with your boss.

Healthcare Costs

Rising medical costs make healthcare a top concern for all retirees these days, but it’s especially important for women. Expected health care costs during retirement are about $83,000 higher for women than men, according to a 2017 study by HealthView Services. Given the greater longevity for women and smaller savings options, due to the factors above, it’s vital that you create a strategy to plan for healthcare costs. Consider a health savings account (HSA). It offers tax-free contributions and can be used for out-of-pocket expenses. It can also cover Medicare premiums in retirement. IRAs and annuities are also good options to explore.

Social Security Obstacles

Currently, women get paid a salary nine fewer years than men do. One of the big reasons is that women are more likely to leave their jobs to raise kids. If you decide to give up your job for your family, keep in mind that you’ll receive less money after retirement from your individual Social Security benefit. Other factors like divorce can affect how much money you receive as well. If you get a divorce but weren’t married for 10 years or more, you aren’t eligible to receive benefits based on your ex-spouse’s Social Security. If you remarry, you forfeit the Social Security benefits from your first spouse. If you happen to find yourself in one of those situations, make sure you have other plans in place to fund your nest egg, so you aren’t solely relying on social security money.

Leave a Reply