3 Retirement Roadblocks for Women

Posted by: Joseph Kuo | March 11, 2022

Regardless of status, women need to have a savings and earnings plan for retirement. However, many women are not taking the planning steps to secure an income during their post-working years.

Women need to plan for an independent retirement. Statistically speaking, women live longer than men. According to U.S. census figures, the median age of a widow is 59. That means that assuming an average life expectancy,  a widow would need to plan for, on average, 25 or more years of living and retirement expenses.

We’ve also all heard the news stories of billionaire couples divorcing after 20+ years of marriage. It’s not just billionaires though. Couples who have been married for a long time are overall divorcing in increased numbers. From 1997 to 2015, the divorce rate for couples over 50 doubled.

Because of these possibilities, it’s a prudent choice for women to still have their own personal savings and earnings plan for retirement, regardless of their family status.

Today’s women earn more and are likely to be a major contributor in areas where living expenses require two incomes. Yet, one survey found that only 29 percent of the women included retirement planning as a priority. That same study found that only 12 percent of working women are confident that they will be able to retire comfortably.

Three Retirement Roadblocks for Women

In addition having to plan for a longer retirement, there are additional challenges and roadblocks for women in retirement planning. They include the following:

Women Frequently Put Others First

Women often de-prioritize or put off their own retirement savings plans through concern and putting the needs of their family first. The husband or spouse has expensive hobbies. Children will have college expenses. Elderly parents may require ongoing financial support. So the money that could have been earmarked for the IRA or money market fund always seems to go instead for the family’s present needs.

There are alternatives to neglecting the retirement savings plans. They include just saying no and knowing there are other resources—school loans, for example. Life is about balance, and the woman needs to include herself more in the balancing act. If you keep putting everyone else ahead of yourself, you’ll be last.

Women Are More Likely to Earn Less Than Men

Women earn less (and thus have less to save for retirement) than men for a variety of reasons. For instance, women are more likely than men to miss work to care for children and elderly parents. The family Caregiver Alliance cites studies estimating that 66 percent of caregivers are women. The studies further detail that the average caregiver is a 49-year-old woman who works outside the home and provides 20 hours per week of unpaid care to her mother.  It is this time away from work that decreases earnings and derails retirement savings. Some women wind up going on unpaid family leave or even quitting their jobs completely to give necessary family care, resulting in no income at all to save for retirement.

For men, the late 40s to 50s is when they are at their highest earning levels. This is also the point where there are enough years left before retirement that the compounded returns from investment are still significant. In stark contrast, at this critical juncture when they could also be making a sizeable contribution to their retirement nest eggs, women are instead often compelled to leave the work force out of an obligation to care for a family member.

Adding to the challenge is the unfortunate reality that even when working full-time, women often do not make as much as men working in the exact same position. Both these factors combined create a huge roadblock for women who want to save for retirement.

Many Women Lack a Plan for Retirement

Although many women actively help manage monthly budgets for their family, developing a long term investment plan for capital growth is a different skill set that requires continuous effort. With career, children, running a household, and possibly elder care already on their plate, many women just don’t have the bandwidth. Thus they are more likely to leave it to their husband or spouse and less likely to build their own overall financial literacy and. Although it’s always good to work as a team and divide family responsibilities, the woman again runs into the risks of unexpected single status detailed above.

Financial literacy requires taking the time to learn the basics of investment, savings, and tax strategies. Expertise comes gradually from experience and study, but often more quickly from expert financial advisors.

Tips to Get Around Retirement Roadblocks

In the face of the foregoing and other obstacles, women who are willing to take the right steps can achieve a secure retirement. Financial web site The Street shares four moves for women to feel more secure in their financial future:

  • Expect the unexpected. Start early and think about life events that will affect retirement. These can be anticipated events (buying a house, college savings) as well as unanticipated (work interruption, medical expense).
  • Ask the right questions. Do the research and inventory assets and current life expenses as compared to retirement living. If you are not sure how to go about these processes, a financial advisor can help.
  • Start investing now and take advantage of savings tools and strategies. Pay your retirement savings account first by automatically depositing the amount from your paychecks. Out of sight, out of mind.
  • Seek a high-quality and balanced mix of savings and investment strategies. Women can overcome the lost work time and lower earnings with sound investment strategies.

Women don’t have to feel alone when it comes to planning for a secure retirement. Follow the above advice and look for a financial advisor who provides education, information, and choices with likely outcomes in order to empower yourself to craft a secure financial future.

Would you like help with creating a plan for retirement? Contact me via email at joseph@abundancewp.com, or schedule a meeting by clicking the button below:

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