Why Women Need to Be More Proactive with Retirement Planning

Women must be more proactive with their retirement planning. Women face unique financial challenges that men do not, such as: a longer life expectancy, less career growth, the gender income gap, and family caregiving responsibilities. Your retirement plan should take this into consideration to protect your financial future.

Women need a proactive approach to retirement

Women must be more proactive with their retirement planning. Women face unique financial challenges that men do not, such as: a longer life expectancy, less career growth, the gender income gap, and family caregiving responsibilities. Your retirement plan should take this into consideration to protect your financial future.

While retirement planning is important for everyone, women have unique financial challenges to face in their later years. Many Americans are unprepared for retirement, but women are especially vulnerable to financial problems later in life. This can be due to a multitude of reasons including the gender income gap. Diligent financial planning and retirement preparation are key when it comes to making sure you’re ready for your future.

Here’s what every woman needs to know about retirement planning.

Unique Challenges Facing Women and Retirement Planning

Men usually take on the long-term financial planning, so women need to have an active role in understanding what it will take to have a financially successful retirement. Here are some challenges that are unique to women’s retirement planning.

1. Increased longevity.

The average American woman lives to be around 87 years old. 25 percent of women who are older than 65 will live past the age of 90. After a spouse passes, retirement income can become confusing with some companies giving survival benefits from a pension of around 50 percent. Because women are outliving men and men are generally making more money. A long and healthy life can mean trouble for financial success in retirement. A financial advisor can help you assess your investment time horizon for your estimated life expectancy.

2. Less time in the workplace.

Women often take more time off work to have and raise children and typically retire two years earlier than men. Less time in the workplace means less earnings and less contributions to a retirement savings plan.

3. Gender income gap.

Across their lifetime, women make $0.81 for ever $1.00 a man earns - and the income gap is wider for minority women. The gender gap means that women are not able to save as much for retirement and any contributions being matched by their workplace is less than what is being matched for male counterparts.

4. Gray divorce and widowhood.

Retirement planning for single women can bring unique challenges. As ‘gray divorce’, or divorce after the age of 50 rises, and women are more likely to be widowers, it’s increasingly likely that a woman will be single in her senior years. Nearly 40 percent of women between the ages of 45 to 64 are unmarried. And, nearly 50 percent of single women retirees are fearful they will run out of retirement savings if they live past 90 years old.

Retirement Planning Tips for Women

Research from the Bank of America Merrill Lynch and Age Wave show that these factors can put women at a serious disadvantage for retirement planning. Their study found that after accounting for the wage gap, time off work, and early retirement, men can earn as much as $1,055,000 more than women over their lifetime. When you combine this with women’s increased longevity, retirement planning is crucial.

It’s never too late to start planning for your financial future. Contacting a fiduciary financial advisor is the first step to creating a retirement plan for women who want to be well-prepared for the future. An expert financial advisor or fiduciary can help you invest and plan for your unique needs.