Tips for Women Who Want to Enjoy a Secure Retirement
How to Be Intentional About Building Financial Security for Your Golden YearsKathy Longo, CFP®, CAP®, CDFA® Monday, 13 March 2023
Achieving a financially secure retirement is something that we all strive for, but this may be more difficult to accomplish for women than it is for men. This is due to many economic and social factors that work against women in intersecting ways. For one thing, women tend to live longer than men, meaning they need to save mre money to support themselves in retirement. In addition, women are more likely to take time off from work to care for children or aging parents, which can lead to gaps in their employment history and lower retirement savings. In this article, we'll explore why retirement planning is important for women and provide tips for creating a secure retirement for yourself.
Why Retirement Planning is So Important for Women
Women face a number of challenges relative to men when it comes to retirement planning. Here are a few of the key factors to consider:
Longer Life Expectancy: Because women have longer life expectancies than men, they must have more money saved if they want to enjoy a secure retirement. According to the Social Security Administration, a woman who is 65 years old today can expect to live, on average, until she is almost 87 years old. That's nearly two years longer than a man who is 65 years old today.
Lower Lifetime Earnings: Due to the gender pay gap, women tend to earn less than men over the course of their careers. According to the U.S. Census Bureau, women who worked full-time, year-round in 2020 earned only 83 cents for every dollar earned by men. This wage gap can translate into lower retirement savings and Social Security benefits, making it more difficult to enjoy a financially secure retirement.
SEE ALSO: Six Money Moves for Women Who Want More Financial Security
Career Interruptions: Women are more likely than men to take time off from work to care for children or aging parents. According to the Congressional Research Service, women aged 65 and older are more vulnerable to poverty, too. This can be due to women being more likely to take time off from work, to work part-time, or to work in jobs that don't offer retirement benefits.
These challenges make it especially important for women to start planning for this phase of life as early as possible. A secure retirement requires intentional preparation and strategy.
Get a Jump Start on Planning for a Secure Retirement
For women struggling with their retirement planning, here are some tips to help get you started:
- Set retirement goals: Start by thinking about what you want your retirement to look like. Do you want to travel? Volunteer? Spend time with family? What does the day-to-day look like in your ideal, financially secure retirement scenario? Once you have a vision for your retirement lifestyle, you can start to set specific goals for your savings and investment strategy.
- Calculate your retirement savings needs: Determine a savings goal that you need to reach before you retire so that you can live out your golden years comfortably. It’s difficult to find fulfillment and joy in this phase of life if you are facing financial stress, so make a plan. Take into account your current age, expected retirement age, life expectancy, and expected Social Security benefits.
- Develop a savings plan: Once you know how much you need to save for a financially secure retirement, develop a savings plan that works for your budget and lifestyle. Consider contributing to a 401(k) plan or IRA, and look for ways to save money on a regular basis. If you have trouble staying motivated, envision the peace of mind you’ll feel through having a financially secure retirement and remember you are, essentially, paying your future self.
- Maximize your Social Security benefits: If you're eligible for Social Security benefits, it can be tempting to apply for them as soon as you’re eligible. However, you can often enjoy a more secure retirement if you’re able to maximize your benefits by waiting until your full retirement age to start receiving them. You can also boost your benefits by delaying retirement, working longer, or working part-time for a few years.
SEE ALSO: Three Retirement Myths Women Should Stop Believing
- Invest wisely: Consider working with a financial advisor to develop an investment strategy that is appropriate for your goals and risk tolerance. A professional can help you diversify your investments across stocks, bonds, and other assets to reduce risk. By creating more financial security for yourself now, you can enjoy a more secure retirement, too.
- Plan for healthcare costs: Healthcare costs can be a major expense in retirement, so be sure to plan accordingly. Keep up with regular check-ups and see specialists as needed. After all, part of enjoying a stress-free and secure retirement is taking care of your physical body. Think about ways you can remain active and start adopting healthy habits now.
- Review and update your plan regularly: Your retirement plan should be a living document that you update regularly as your life circumstances change. Instead of thinking of it as a one-time process, be sure to review your plan annually and make adjustments as needed.
Concluding Thoughts on Achieving a Financially Secure Retirement
Retirement planning is important for everyone, but it's especially important for women due to factors like longer life expectancy, lower lifetime earnings, and career interruptions. By starting early and taking the right steps, women can ensure that they have enough money to support themselves through a secure retirement for many years.
If you're feeling overwhelmed by retirement planning, consider working with a financial advisor you trust. A skilled advisor can help you develop a retirement plan that is tailored to your unique needs and goals and can provide guidance and support as you work towards your goals for a secure retirement. Contact my team at Flourish Wealth Management today to learn more about how we can help you plan for your ideal, financially secure retirement.
About the Author
Kathy Longo, CFP®, CAP®, CDFA®
Kathy Longo brings over 25 years of expertise and experience to Flourish Wealth Management. Kathy is wholly dedicated to improving the life of each client and finds joy in making complex matters simple and easy to understand. She excels at asking the right questions, uncovering new possibilities and implementing the most advantageous strategies for success. Playing such a pivotal role in her clients’ lives remains an honor and a privilege. After earning a degree in Financial Planning and Counseling from Purdue University, she began her career at a small firm in Palatine, Illinois where she worked directly with clients while learning to build a viable, client-centric business. Over the years, she gained extensive knowledge and wisdom working as a wealth manager, financial planner, firm manager and business owner at notable, various sized companies in both Chicago and Minneapolis.