Ladies, we know that “one size doesn’t fit all,” and that is especially true when it comes to planning for retirement. When we look to the future and retirement, we can’t think like men. Let’s look at three unique challenges that force women to think differently about retirement:
A Longer Retirement
Congratulations! If you were born in the year 1950, then your life expectancy is 5.5 years longer, on average, than a man born that same year. A longer lifespan means that we can cross even more things off our bucket list and spend more time with our grandchildren. It also means that we have to make our money last longer and that we may lose pension income and social security income if we outlive our spouse.
You’ve probably heard by now that the U.S. Census Bureau concludes that women earn $0.78 for every dollar that men earn. Not only do women need to stretch their dollars farther in retirement due to a longer average lifespan, but they may have fewer dollars to do it with! A smaller paycheck means less money available to put into the 401(k) or IRA. Over decades, this discrepancy can really add up…or down, to be more accurate.
Mothers and Caregivers
Men are pitching in more with raising the kids and taking care of aging parents, but women still reign supreme in both these roles. Many women choose to leave the workforce to take care of their children. (The Pew Research Center found that 29% of mothers did not work outside of the home.) Baby Boomers are also feeling the pull of caregiving responsibilities as their own parents age and require support. A study by the Metlife Mature Market Institute found that 28% of women take on caregiver roles as opposed to 17% of men.
Between taking care of children and aging parents, women give up a significant portion of their potential lifetime income, which affects the amount they can put away for retirement, the interest they earn on their retirement savings, and the amount of Social Security income they can receive.
No Wonder Women Are So Nervous About Retirement
With all the retirement challenges that women face, it’s no wonder that the Insured Retirement Institute found that .
These are big challenges, but the first step toward overcoming any obstacle is to acknowledge it. Now that we know what lies ahead, women can begin planning in a smarter and more strategic way. Visit our special retirement section for great advice tailored just for women!