Women face unique challenges throughout their lives and they need a retirement plan that reflects that. National Retirement Planning Week is upon us and it is a week dedicated to educating Americans on retirement. At WISER, we understand the unique needs that women have when tackling this topic, and it is important that women themselves understand the issues that will have a tremendous impact their retirement planning.
Women on average earn less over their working years than men do, which means they have less to save. Women are also usually the primary caregivers, and are more likely to take time away from work or reduce work hours to care for children or other family members. Furthermore, women are more likely to work part-time which means fewer, if any, options for retirement benefits. What this means for many women is that they have less money in savings and pensions when they reach their retirement years. This reality is often made worse by the fact that once women are in retirement, many are likely to live alone due to divorce or widowhood, and they do not have the financial help a partner can provide. Women also tend to live longer, which forces them to stretch their retirement income over more years. Even among those who take their life expectancies into account in their planning, there is insufficient understanding of the financial consequences of living to extreme old age—generally above age 85 or 90 where women outnumber men by 4 to 1.
Put all of this together and it is no surprise that women are twice as likely to end up living in poverty in old age. They can least afford to make mistakes with their money, and so they need to be making the most of what they have throughout their lifetime financial journey. When it comes to women and planning, while many manage the day-to-day budgeting and family finances, they are less likely to be involved in the bigger financial picture, such as investments and insurance. They may not understand or even know about their own or their spouse’s work retirement plans. In order to secure a good retirement for themselves, however, women must be part of their family’s long-term financial decision-making. When couples do plan together for retirement, they often share the same retirement plan, but the reality is that women face a very different retirement picture, and they need their own plan that is best suited for their unique situation.
Spend some time this week teaching yourself about what you will need to retire well. WISER’s website provides year-round resources on retirement planning, as does the National Retirement Planning Coalition website. To get started you can read over WISER’s newly re-released fact sheet, 10 Ways that Boomer Women (and Men) Can SAVE Themselves from Retirement Shortfalls. When it comes to retirement just remember, you can do a lot with even just some good, basic information; a little goes a long way and it is never too late to get started.