4 Reasons Retirement Planning is Harder for Women

By in ,
4 Reasons Retirement Planning is Harder for Women

Women make up about half of the U.S. workforce. Owning almost 12 million businesses, a full 40% are the breadwinners in our households. So how come females can’t retire as comfortably as men?

When it comes to saving for retirement, women have a much tougher mountain to climb than their male counterparts. But the following four hurdles can be overcome with careful planning.

1. Women Live Longer

Across the world, women live longer than men, with the difference averaging about six to nine years in most developed nations. This means they need much more income during retirement.

Extended life expectancy equals more rent/mortgage payments, utility bills, leisurely activities and healthcare costs. In fact, a retired woman can expect to pay $147,000 in their golden years on healthcare costs alone (that figure doesn’t include long-term care). For men, the estimated cost is $133,000.

2. Parenting

When their children are small, women generally take the care-giving lead, leaving the workforce to raise their offspring (and caring for aging parents). This takes a toll on their bottom line in retirement; drawing a salary for an average of nine fewer years than men are. This also means missing out on years of contributions, possibly with an employer match, and the benefits of compounding in a 401(k) (and they’ll likely see less in Social Security and pension benefits).

3. The Wage Gap

Even when working full-time, women on average earn less than men in nearly every occupation. While the gap is closer for Millennials, in general, women still make 80 cents for every dollar a man brings home.

That 20% wage gap can be explained in part by women’s time out of the workforce, but it’s also because of occupational segregation. Again, the gap can affect women’s Social Security and pension benefits, as well as their retirement savings.

4. Resistance to Invest

Women tend to be less adventurous investors than men. While playing it safe is probably a good approach when near or in retirement, it also can mean less growth when in the accumulation stage of their investing years.

To ramp up savings, women have to combine their best investor traits with a willingness to make smart investments. If you don’t know where to start on this topic, speak to a professional financial advisor to create a customized strategy just for you (see more on this below).

When to Ask for Help

With a longer lifespan and often less time building a nest egg, the stakes for women are higher in retirement. However, women have a hard time discussing their finances: 56% of women said they refrained from discussing finances because the subject is too personal (according to a Fidelity Investments Money FIT Women Study).

You don’t have to know a lot about investing to ask those questions of a professional advisor. A personalized financial strategy gives you a better sense of security, so If you’re a woman who’s been avoiding financial planning, it’s never too late to get involved.

At CKS Summit Group, our focus is to bring you fresh new ideas for your retirement income. Our cutting edge tactical portfolios help our clients achieve safe, healthy growth of their savings and preservation of their principal balance. Contact us here today and we’ll set up your complimentary strategy session. We look forward to hearing from you.