Retirement Planning for the Long Lives of Women

Historically, there has been a gender gap in retirement planning due to unequal wages, informal services and interruptions in careers, but according to a recent study, women are beginning to close the gap in retirement plan account balances and savings rates on their male counterparts. It is important to highlight the special needs of women when it comes to wealth and retirement planning during Women’s History Month. Women need to establish a comprehensive retirement plans – employing a customized variety of saving vehicles, including annuities – as women tend to live longer thus accruing more expenses throughout their lifetime.

Planning for retirement is difficult – and for women it can present an even greater challenge. On average, women have a greater life expectancy and are more likely to be caregivers for their partners, live on their own for years after they have been widowed and require assisted living or nursing home care. While women are beginning to plan effectively for this long life, they need more resources and financial advice to make the right investments for an affordable and comfortable future.

The Unique Financial Situation of Women

Women Earn Less Than Men – Although the wage gap has closed significantly, women still earn an average of 81 cents to the dollar made by their male counterparts. When it comes to retirement, less earned translates into lower social security and pension contributions.

Women Save Less for Retirement – Although there are more women in the workforce than ever women are still slightly behind when it comes to retirement savings since women often do not qualify for employer benefits under part time pay schemes and experience more interruptions to work with child bearing or care-giving.

Women tend to be Conservative Investors – Women actually make most of the financial decisions for a family – setting budgets, saving on essential expenses and teaching children about the value of money. However, when it comes to saving and investing money, the ability to stretch a dollar results in a reluctance to risk.

Women Live Longer – American women are expected to live an average of 84 years – 3 years longer than their male partners. These senior women are likely to put off retirement to become caregivers for their partners, require supplemental income after the loss of their partners, need expensive health treatments and pay for their own senior care.

3 Steps Women Can Take Towards a Long and Healthy Retirement

Assess Current Finances and Educate Yourself

Before you can create a successful plan, you need to know where your current finances stand, set your short and long-term goals, and review every option available to you. You will need outside advice at some point, so gather all of your essential financial documents – income, debts, savings, budgets, taxes, etc. – into one place for easy access. Begin educating yourself on the financial planning basics you do not understand – senior living expenses, pensions, 401k, annuity, tax-deferred, rollover, death benefits, life insurance, etc. – so that you will be familiar with the concepts and vehicles you will encounter moving forward.

Speak with the Professionals

Of course everyone has the option of making their own financial decisions, but working with individuals who know intricacies of a wide variety of financial planning tools may help you design a plan which addresses your specific needs. The more you understand before speaking with a financial planner, the more confidence you will have in the choices you make together. Don’t leave your retirement up to hearsay and opinions, speak with a trusted professional.

Design a Plan

Once you have gained a little knowledge, gotten some expert advice and set your short and long-term goals, it’s time to develop a plan. Create a financial plan to save and invest in an affordable manner to achieve your goals, then begin working through the step of your plan. Expect emergencies and figure out how to plan around them with extra resources. Then continue to review and revise your plan as you age.

Women cannot afford to put off retirement planning. Their unique situation as mothers and caregivers is the very reason they need more time and resources to plan for the long life ahead. If you haven’t made a retirement plan, it is not too late. There are options for catching up, vehicles to protect you in the long-term and professionals with the knowledge to address your unique situation.

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