Women & Retirement: The Gender Gap

Wednesday Feb 2nd, 2022

After decades of working and saving, you see retirement on your horizon. As a woman, preparing for retirement can look a little different than for men. With each passing decade, we see stereotypes changing, but women are still predominantly caregivers for the people they love which impacts things like income and benefits over time. Research shows that 39% of women took a significant amount of time off work to care for loved ones – compared to 24% of men.¹ Women who are working also tend to put less money aside for retirement, saving just 7% of their paychecks on average, while men save closer to 10%.²

According to research, Women also live longer than men which means that they need more saved for retirement.³ The Social Security Administration (SSA) estimates that today’s average 65-year-old woman will live to age 86½. Given these projections, it appears that a retirement of 20 years or longer might be in your future. ⁴, ⁵ What are some actions that you can take to make sure you are financially secure when you retire? Here’s five steps we think are important.

Define your goals. Whether you are single or have a partner, it is important to identify your retirement goals and what your current retirement standing is today. Being proactive and defining where you want to end up is crucial in taking control of your financial future.

Ask good questions and talk about money. You want to be confident and be able to envision your future so that when faced with a decision, you know what the best decision for you should be. You might have questions that surface when you identify your next steps like creating additional income streams, protecting your retirement savings and how to best draw retirement income? Finding a professional to help provide answers can assist with building confidence.

Enlist a financial professional. Working with a financial professional who understands your needs and the challenges women face when it comes to saving for retirement, can help you identify where you might not be well prepared and ways to boost your retirement income. If you work with a financial advisor who offers holistic planning, they can advise you on the best way to claim Social Security and if extended care coverage might be needed for your unique situation. If you are a nonworking spouse, you might work with them to open a spousal IRA or collect Social Security benefits based on the working spouse’s earnings record once the working spouse has filed for benefits.

Adjust your budget. Like you would do for any other major purchase, adjust your budget accordingly and check in regularly to make sure you are on track. Forty-four percent of American women are the primary breadwinner in their house.⁶ Yet only 10% of women feel very confident in their ability to fully retire with a comfortable lifestyle.⁷

Invest strategically. Everyone’s main retirement goal is to not run out of money during retirement. A financial professional can guide you in creating a diversified and balanced portfolio to help you reach your long-term goal.

When it comes to preparing for retirement, you never want to leave your future to chance. If you feel uncertain about where you stand for your retirement, now is the time to retake control.

  1. Pew Research, 2019
  2. Money Talks News, 2019
  3. Business Insider, 2019
  4. CDC.gov, 2020
  5. SSA.gov, 2020
  6. CNBC.com, 2017
  7. TransAmericaCenter.org, 2017

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