Retirement planning is important for everyone, but women, in particular, face unique challenges when it comes to saving for retirement. Studies show that women tend to live longer than men and may take time off from work to care for children or aging parents, which can impact their retirement savings. To overcome these challenges, women need to save more, start saving earlier, and invest more aggressively for retirement.
Here are some reasons why women need to prioritize retirement savings and how they can do it:
- 1 Longer life expectancy
On average, women tend to live longer than men, which means they will need more money to support themselves in retirement. According to the Social Security Administration, a woman who reaches age 65 can expect to live, on average, until age 86.6, compared to age 84.3 for men. This means women need to save more to ensure they have enough money to last throughout their retirement years.
- 2 Time out of the workforce
Women are more likely than men to take time out of the workforce to care for children or aging parents. According to the National Women's Law Center, women lose an average of $324,044 in wages and benefits over their lifetime due to taking time off from work to care for family members. This can impact their ability to save for retirement and may result in lower Social Security benefits.
To overcome this challenge, women should try to save as much as possible during their working years and consider working longer to make up for lost time. Women should also take advantage of catch-up contributions to retirement accounts once they reach age 50.
- 3 Lower earnings
Studies show that women tend to earn less than men over their lifetimes, which can impact their ability to save for retirement. According to a report from the National Women's Law Center, women earn only 82 cents for every dollar earned by men. This wage gap can result in lower retirement savings and benefits.
To combat this, women need to be proactive about negotiating their salaries and seeking out promotions and opportunities for career advancement. Additionally women may be more prone to seek out side gigs or additional employment to supplement lost earnings.
- 4 More conservative investing
Women tend to be more conservative when it comes to investing, which can result in lower returns over time. According to a report from Fidelity, women tend to hold more cash in their investment portfolios than men and are less likely to invest in stocks.
To overcome this challenge, women should educate themselves about investing and take calculated risks with their investments. Women should also consider working with a financial advisor who can help them develop an investment strategy that aligns with their risk tolerance and financial goals.
- 5 Lack of confidence
Studies show that women tend to lack confidence when it comes to managing their finances and investing. According to a survey from Fidelity, only 9% of women surveyed described themselves as "very confident" in their ability to invest, compared to 23% of men.
To overcome this challenge, women need to educate themselves about personal finance and investing. This can include reading personal finance blogs and books, attending financial planning workshops, and working with a financial advisor who can help them develop a financial plan and investment strategy.
It comes as no surprise really that women face unique challenges when it comes to saving for retirement, but there are steps they can take to overcome these challenges. Women need to save more, start saving earlier, and invest more aggressively to ensure they have enough money to support themselves in retirement. By being proactive about their finances and investing, women can achieve financial independence and enjoy a comfortable retirement just as well as anyone.
I hope you found these concepts I’ve shared with you today valuable, and perhaps gave you a few things to consider as you continue to plan your journey down your own financial path.
