Why Retirement Planning is Different for Women

Retirement planning
No matter your age or marital status, you can and should plan aggressively for retirement.

It’s relatively common knowledge that women tend to have a longer life expectancy than men. But the common knowledge is also backed up with data. According to the Social Security Administration, a man who is 65 years old today can expect to live to 84.3 years. But a woman who is 65 can expect to live to 86.6.

While a longer life expectancy seems like a good thing, it means something more. The longer you live, the more you’ll need in retirement income. But even though women need more money than men, many women are less prepared for retirement than their male counterparts.

Here’s why, and what you can to do improve:

Women Tend to Save Less Than Men

Women often earn less than men, and they also save less. According to the “Income, Poverty, and Health Insurance Coverage in the United States” report by the U.S. Census Bureau, women earn 78 cents on the dollar compared to men, and women save slightly more than 10 percent toward retirement while men save more than 11 percent.

This poses a significant problem with retirement planning if you’re female. Financial expert, Clark Howard, says women need to save more – a lot more – while still in the workforce. You should also take advantage of savings boosters such as employer-matched 401(k) plans.

Retirement planning
Money in the bank can’t grow as well as money invested elsewhere.

Investment Strategies for Women are Often Too Safe

Howard calls it a “perfect storm,” the combination of living longer, but earning less, saving less, and saving too safely. And although saving money and not investing it seems safe, this strategy puts retirement income at risk. So it’s not as safe as it seems.

Investing can boost what’s saved to give women more security after retirement. The younger you start investing, the better off you’ll be. Most investments go through ups and downs, making the whole idea seems like a less-than-ideal way to set aside money for retirement. But left alone, what you invest is historically much more likely to grow than to suffer any long-term loss.

Retirement planning
You’re never too young to begin your retirement income strategy.

Women Should Learn as Much as Possible About Investing

Knowledge is power, and there’s no reason not to educate yourself about investing. Consumer Reports recommends “The Little book of Commonsense Investing,” by John C. Bogle as a great start in your financial education. The more you know, the less intimidating the world of investments will be.

The reason investing is so important is that it’s your best shot at maximizing every penny that you put toward retirement. You might earn less and have fewer years in the workforce than the average man, but investing in stocks creates growth that you will not find in any savings account. Instead of seeing safe but precious little growth, you’ll have more money to supplement those additional years.

Women and men lead very different lives, but that doesn’t mean you can’t be as prepared for retirement as the menfolk. If you’re single, you have even more reason to take retirement planning into your own hands and secure your future.

NewRetirement can help you with retirement planning, from the initial steps through sophisticated money management strategies that you might never have thought possible on your income.

Begin with our retirement calculator to learn where your retirement plans stand today. You’ll see how much is needed for a comfortable retirement, and also gain insight on how to improve. Let NewRetirement help you design the financial life plan that will give you the security for a happier retirement.

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NewRetirement Planner

Do it yourself retirement planning: easy, comprehensive, reliable

NewRetirement Planner

Take financial wellness into your own hands and do it yourself retirement planning: easy, comprehensive, reliable.

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