When it comes to saving for retirement, women face quite a few additional challenges. As hard as it is to retire comfortably in the first place, these extra obstacles can make a huge difference in their likelihood of success. So let's delve into these unique barriers and talk about ways to offset their impact.
Women Live An Average Of 5 Years Longer
In the United States, women tend to live an average of almost 5 years longer than men. That means that they need to have 5 extra years' worth of money saved up. Due to this discrepancy, among others, women pay more in medical expenses and are more likely to live in poverty after retirement.
It's important to start saving early and have a realistic idea in mind of how much you'll need and for how long.
Women Make 20%-50% Less Money
While this is a complex issue with numerous variables to account for, studies have sought to pin down the difference and they've found the wage gap between men and women to be anywhere from 20% to 50% in recent years. That means women are starting out with less AND have to accumulate more! Plus, since Social Security benefits are calculated by earnings, women get less money out of that as well.
Don't just save for retirement. Savings won't be enough to live off for 30 years for most people so investing wisely is key!
Women Spend More Time Caring For Others
The majority of family caregivers are still women, which often means taking more years off, working fewer hours, and needing more flexibility. This can further lessen her Social Security benefits, potential earnings, and pension and/or retirement returns.
Put extra TLC into your relationship with your financial advisor as well. Check-in often to find out how your money is doing and how you could make improvements.
Women Invest More Cautiously
Women tend to take fewer risks when investing, and for good reasons. With less money to start with, more time and expenses to pay for, and a brain that's biologically programmed to avoid risk for the good of the family, it's no wonder women are less likely to have a "let it ride" mentality. However, being too risk-averse can mean getting far less reward, too.
Let this work to your advantage! Diversify to minimize your risk and favor long-term investments to maximize your ROI. These are good strategies for investment and can give you the peace of mind and security you need to take bigger gambles on other, less predictable investments.
Women Are Less Comfortable & Confident Talking About Money
One study had numerous statistics showing women being interested in learning and participating more in their finances but not being comfortable or confident enough to do so. For some, it was a matter of the social stigma surrounding the discussion of money, even with close friends and family. For others, they didn't feel they were well enough equipped to discuss finances or participate in investing.
Do enough research on your own to assure yourself that you can tell the difference between the good advisors and the not so good ones, and research what they tell you before deciding what action to take to ensure you're making the right move for you. Make sure you deal with qualified, respectable professionals and work with them rather than just giving them the reins.
Most Important Takeaway
Like it or not, this is the biggest financial goal you'll ever have. It's paramount that everyone is able to recognize the hurdles they face along the way, make an honest assessment, and plan responsibly for the future. The last few decades of our lives depend upon it.
If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a free financial analysis.
Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs. You don’t have to struggle with high-interest credit card debt any longer.