Some of our recent research has indicated that a large number of women don’t feel confident about their retirement plan. Don’t be part of this statistic. Make sure you’re properly prepared for your golden years by equipping yourself with the knowledge to make a sound, financial decisions for the long term. Here are some facts that can help guide retirement planning for women.
Close the Gap
Unfortunately, women earn less than men, on average. Currently, women make 80 cents for every dollar a man earns. As you can imagine, this is a problem when it comes to women’s retirement savings. In order to save enough, you must earn enough. Legally, women are entitled to the same amount of pay as men for doing the same work. Be proactive by discussing your salary with your boss so you get what you deserve
Plan for a Longer Life
Most women outlive men by two or three years, so they need to have more money to cover their retirement. This means they typically have less money saved up. One in four 65-year-olds also make it past the age of 90, so make sure you have a plan that accounts for longevity and allows you to save more. You want to make your retirement funds last.
Don’t Count on Social Security Benefits Alone
Although family dynamics are changing, women are still more likely to leave their jobs to raise kids or care for aging family members. Currently, women draw a salary for an average of nine fewer years than men are. If you decide to give up your job for your family, keep in mind that you’ll receive less money after retirement from your individual Social Security benefit. Divorce can also affect how much money you receive. If you get a divorce but weren’t married for 10 years or more, you aren’t eligible to receive benefits based on your ex-spouse’s Social Security. If you remarry, you forfeit the Social Security benefits from your first spouse. If you find yourself in one of those situations, make sure you have other plans in place to fund your nest egg, so you aren’t solely relying on Social Security money.
Budget for Healthcare
When determining how much is needed to live comfortably in retirement, many women often forget to factor in healthcare. Rising medical costs make healthcare a top concern for all retirees these days, but it’s especially important for women. Expected health care costs during retirement are about $83,000 higher for women than men, according to a 2017 study by HealthView Services. Given the greater longevity for women and smaller savings options, due to the factors above, it’s vital that you create a strategy to plan for healthcare costs. Consider a health savings account (HSA). It offers tax-free contributions and can be used for out-of-pocket expenses. It can also cover Medicare premiums in retirement. IRAs and annuities are also good options to explore.