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Planning for Women’s Retirement

July 12, 2022

According to our statistics, women's retirement looks slightly different than retirement for men. This could be due to a number of reasons from unequal pay to the higher likeliness of women staying home as caregivers. Although these stereotypes and inequalities are changing, women typically accumulate less income and therefore have less money put aside for retirement. Considering that women are more likely to live longer than their male counterparts, it's important to look at these strategies early on so you can be better prepared. 

The trends to know about women’s retirement

No one wants to live as a statistic, but these trends help us understand how we may be affected by retirement differently than men. 

  • Women typically retire later in life, often around age 65. 
  • Women are more likely to outlive their husbands, so they have a longer time to rely on retirement income alone. 
  • Women are also more likely than men to outlive their savings and Social Security benefits, which can lead to financial insecurity in retirement.
  • Many women are still contributing to traditional 401(k)s and IRAs, but they may not be getting the same returns as men and their contributions may not be enough to cover their cost of retirement (especially if they're relying on Social Security).
  • Women tend to have lower incomes in retirement than when they were working. This can be due to a number of factors, including years of interruptions in their careers, childbirth, and caregiving responsibilities.
  • Women are more likely than men to rely on social security as their main source of income in retirement. This is largely due to the fact that women earn less on average than men throughout their careers and have less access to employer-sponsored retirement plans.

How can you combat these trends? Start saving now and talk to a financial professional about the best way to plan for your retirement. With the right strategy and support, you can achieve the retirement that you've always dreamed of.

Start early and save now

Start looking into your retirement plan now. Once you enlist a financial professional, you can make a budget with what you've earned, are currently earning, and hope to gain through benefits when retired. Do this early, so you can adjust it accordingly to account for a longer retirement---which could be as long as 20 to 30 years.

Women are also more likely to rely on their retirement savings to support themselves after they retire than men. According to a study by the National Institute of Retirement Security, women account for 57% of all individuals who rely on Social Security as their only source of income in retirement. Additionally, women are more likely than men to have other types of financial assets, such as a home equity loan or a 401(k) plan account. This means you have more options when planning for your retirement. 

Ask a lot of questions

There are a lot of things you can do to make sure you have a comfortable retirement, but one of the most important things to do is to ask questions. Talk to your spouse, friends, and a financial professional about what kind of retirement plan would be best for you. You might be surprised at all the options available to you.

Here is a preview of some possible questions and answers you might discuss with a financial professional: 

How can you draw retirement income from what you've saved?

First of all, there are a few ways. One way is to convert your savings into a retirement account such as an IRA or 401k. Another way is to sell your investments and use the proceeds to pay down debt or purchase assets that will provide consistent income in retirement, like real estate or stocks.

What are other ways to generate income in order to supplement Social Security?

Luckily, there are a variety of other ways. One option is to work part-time and take care of personal finances. Another is to start a small business. Additionally, many people can invest in stocks or mutual funds, which can provide additional income.

How can you protect your retirement savings and other financial assets?

In order to protect your retirement savings and other financial assets, make sure you have a solid plan in place for when you retire. Keep a diversified portfolio and stay up to date on the latest investment trends. You can also track your expenses so you can identify any areas where you may be overspending and then adjust accordingly. 

Don't forget your Social Security benefits 

Remember that you can always rely on Social Security benefits to help supplement your income in retirement. Keep in mind that these benefits are based on your lifetime earnings, so if you have low annual income in retirement, your benefits may be reduced. This is increasingly important considering that most women rely on Social Security as their main source of income for retirement, as mentioned earlier. 

There are a few things you can do to make sure you claim your Social Security benefits carefully. First, make sure you are eligible for benefits based on your work history and age. Second, be sure to wait past your full retirement age to claim these benefits. This guarantees you a larger return---as much as 8% more on monthly payments. Finally, keep copies of all your paperwork in case there is a problem with the claim or payment.

The decision to claim Social Security benefits is an important one, and it's important to be aware of all your options.

Remember you're planning for your future

Retirement planning is a critical step in ensuring a comfortable retirement for you and your loved ones. It's important to remember that you're planning for your future, which means taking into account your current financial situation and future goals. And remember to budget for the activities that retirement is all about, such as traveling and experiencing new adventures. 

A woman's retirement can be an amazing time of growth and reflection. By planning ahead and choosing the right time to retire, you can create a safe and secure retirement nest egg. You'll have plenty of free time to enjoy those golden years.

To help make retirement planning easier, consider talking to an advisor about all of your options.