When it comes to retirement, women can experience more challenges saving for retirement than men. Some of these challenges include leaving the workforce to care for children or other family members and lower pay or challenges in finding full-time employment.
According to the Transamerica Center for Retirement Studies, only 12% of women are very confident they can retire comfortably, compared with 23% of men. Here are several of the reasons retirement could be different for women than men.
Women Tend to Outlive Men.
The life expectancy for women is generally longer than it is for men. Therefore, women require more money to cover a longer retirement. Unless they plan and save appropriately, they risk premature depletion of their retirement assets and possibly living in poverty.
Women Usually Earn Less.
Even though more women work more today in professional jobs than in the past, a gender pay gap still exists. The U.S. Census Bureau discovered that women earn about 75% of what their male counterparts earn. This discrepancy can make it more difficult for them to save for retirement.
Women Spend Less Time Working.
Women usually take some time off of work so they can care for their children or senior parents. On average, they spend nine more years out of the workforce than men. Less time working reduces their overall lifetime earnings and retirement savings.
Women Miss Out on Employer-Sponsored Retirement Plans.
Since women are more likely to work part-time or contract positions to enjoy flexible schedules, they don’t always receive retirement benefits. In this situation, women can open their own retirement accounts but might miss out on a company match.
Retirement Tips for Women:
Despite these challenges, women can thrive in retirement by implementing these tips:
- Have a Backup Plan: Unfortunately, unforeseen circumstances like divorce, death, or injury can prevent you from retiring as planned. For this reason, having an emergency savings account, life insurance, disability insurance, a budget set, and a plan to reduce your expenses can help.
- Keep Your Job Skills Fresh: Even if you take time off from work, stay up-to-date with your industry. Enroll in courses or attend professional networking events to keep your skills fresh.
- Save as Much as Possible: This may seem obvious, but the more you save at an earlier age, the better prepared you’ll be for retirement. If you take some time off from full-time employment, continue part-time or perform contract work to continue to build your retirement nest egg.
- Participate in Your Employer-sponsored Retirement Plan: If you work for an employer who offers a retirement plan, take advantage of it. Save enough to receive the employer’s match if there is one.
Consult Your Financial Professional.
If you’re a woman planning for your retirement, we can help. Count on us to review your financial situation and help develop a retirement strategy basing on your needs.
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At Zara Financial Group. We aim to provide an educational resource for those wanting to make intelligent decisions about their finances. Our goal is to help you live retirement the way you intended. Contact us today to schedule an introductory appointment.