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The Unique Retirement Planning Needs of Women


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By Katie Moore

When it comes to planning for retirement, there is no one-size-fits-all option. While the retirement goal of being able to live comfortably may be the same, the path to reach that goal can be very different for men and women. There are some unique issues that women need to account for that don’t apply to men. By breaking down these key planning elements, women can more effectively work toward a confident, secure future. 

Women Tend to Outlive Men

Living longer is a good thing, but it also means that a woman’s money needs to last longer. According to the Social Security Administration, the average American woman lives until age 86.6, while the average life expectancy for men is 84.3. The data goes on to show that about one out of every four 65-year-olds will live past age 90, and one out of 10 will live past age 95. (For more, see: Why Women Retire with Less Money.)

Many Women Lack Time to Plan

As a woman, you wear many hats: wife, mother, caregiver to an elderly parent or grandparent, working professional with a full-time job, you volunteer at church or within the community and are active with the school PTA. Add to this running kids to and from sports and after-school activities, keeping up with the laundry and putting a hot dinner on the table. Does this sound familiar to you? Maybe some or all of this describes your life. You don’t have time to take on one more thing on your plate right now. 

The Risk of Needing Long-Term Health Care

Because life expectancy is longer for women than men, the chances of needing long-term care are much more of an issue for women than men. Needing this long-term care means figuring out a way to pay for it, should the need arise.

Fewer Working Years

It is no secret that there is a gender wage gap when it comes to actual income between men and women. While this trend seems to be narrowing there is still a disparity, in part, because it is more likely that women have experienced interruptions in their careers to devote time to raising their families. While this time off to care for family is not viewed as a negative, it does leave gaps in work history, which has a tendency to postpone promotions and raises for women until they have re-established their careers. (For more, see: Scary Statistics About Retirement for Women.)

Women Tend to Be too Conservative When Investing

A survey by BlackRock Investor Pulse revealed that women are more risk averse when it comes to investing. While this propensity can save women from taking unnecessary risks and avoiding short-term losses, it also has the effect of creating less wealth for the long term.

Steps Women Can Take

Stop and take the time to think about your retirement and ask yourself these two questions:

  1. What do you want your retirement years to look like?
  2. What type of income does that lifestyle require?

Consult with a financial planner specializing in retirement income planning. Your future and financial security are too important not to take the time to put a solid plan in place. A great place to start is a pre-retirement analysis of where you’re at currently, what gaps may exist and clear, actionable advice on how to address them based on your individual needs and circumstances.

These first two steps are just the starting point. From there, you need to continuously monitor and adjust your strategies as necessary to ensure they are properly aligned towards achieving, and then maintaining your preferred retirement lifestyle.

When it comes to planning for retirement, women face issues that men don't. Addressing them can help towards reaching a confident, secure future. (For more, see: Retirement Planning Tips for Women.)

This article was originally published on Investopedia.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.






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