Women and Retirement Planning

Many women in America (94 percent) take an active role in managing their household finances. This includes investments and retirement planning.  However, according to the Census Bureau's Survey of Income and Program Participation (SIPP), roughly 50% of women ages 55 to 66 have no personal retirement savings, compared to 47% of men.

This is concerning considering that women live longer than men. That means they will need to fund more years in retirement. The best strategy for women is to plan and start saving as early as possible, so they can increase their chances of having enough money to last during retirement.

However, there are some challenges to this scenario – the gender pay gap and caregiving responsibilities. These factors put millions of women at a financial disadvantage when they enter retirement. Since retirement savings is based on a percentage of earnings, this translates into fewer dollars for women. 

3 Retirement Planning Tips for Women

Set goals and milestones

Without a plan, it’s unlikely that you will reach retirement with the funds you need. Planning starts with preparation:

• Assess your current income and spending habits.
• Identify your short- and long-term goals.
• Factor in who you’ll spend your retirement with and where you’d like to live.
• Account for the realities of a longer life expectancy.

Keeping track of your progress and reaching your milestones encourages you to stay on track.

Create a retirement paycheck

An important aspect of your retirement planning is to determine how you’ll generate reliable income to help you sustain your lifestyle in retirement. Work with your financial advisor to put income streams in place with investments, distributions from IRAs and workplace retirement plans, pension distributions, payouts from annuities, inheritances, and Social Security.

This process will help you estimate the amount of income you’re likely to generate in retirement and identify potential income gaps.

Plan for unexpected events

Your retirement plan is only complete when you prepare not just for the distribution of your assets after your death, but for the possibility of an untimely death, disability, or illness. Long-term care can deplete your retirement fund rapidly.

Written wills and/or trusts, powers of attorney, and healthcare directives should be drafted by your attorney and kept current. If you don’t have a plan in place, you lose control of who may act on your behalf and what may happen to your assets.

“Make sure you have a complete retirement plan in place”, says Richard Eden Senior Vice President of David Lerner Associates, “The sooner you start planning, the more chance you have of success. If you spend all your time working on your company but not any time working on yourself and your future, it could spell disaster."

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IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC