Women and Retirement Planning
Women are wonderful. They outlive men by three to four years on average, and as a consequence, they represent the majority of older Americans. However, on average, they have fewer years of work and lower earnings.
To make the point more clear, at age 65, average life expectancy is 18 years for American men and 20 years for women. Approximately 30% of women and 20% of men will survive to age 90.
National survey data and simulation studies suggest that middle income households have not saved enough to meet all expected retirement expenses.
Like most other things in life, retirement planning is slightly different for women than it is for men because of the many challenges they face. To meet these financial challenges, women need to make retirement planning a priority.
This best advice is to start saving now!
To help improve the chances of achieving a comfortable retirement, start with a realistic assessment of how much you'll need to save. If the figure is so big that you can’t imagine saving that much, don't give up – the most important thing is that you start saving now.
Although it's never too late to save for retirement, the sooner you start, the more time your investments have to potentially grow. If there is a retirement savings plan, such as a 401(k) offered at work, join it as soon as possible. Contribute as much as you can. Contributions are deducted directly from pay, and with an employer matching your contributions, you’d be wise to take advantage of that.
Even if a woman chooses to stay at home to raise a family or works part-time, she can and should continue to save for retirement.
Unfortunately, it is a realistic concern for many women, that they will outlive their retirement savings. So what can you do to help ensure you'll have enough income to last throughout retirement?
Here are some tips:
Estimate how much income you'll need. Use your current expenses as a starting point, but note that your expenses may change by the time you retire.
Find out how much you can expect to receive from Social Security, pension plans, and other sources. What benefits will you receive should you become widowed or divorced?
Set a retirement savings goal that you can work toward, and keep track of your progress.
Save regularly, save as much as you can, and then look for ways to save more. Dedicate a portion of every raise, bonus, cash gift, or tax refund to your retirement savings.
Consider how you can help protect yourself and your family from potentially substantial long-term care expenses. By planning ahead, you could help preserve your choices for care and may avoid becoming a burden on your family.
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