Updated: Nov 5, 2018
The gender disparity in the workforce may not be what it used to be, but it's still a much needed topic of discussion and it's still a big concern when it comes to retirement planning for women. Whether women are married or single, they require specific attention in terms for how to prepare for retirement, and this attention is not often given.
There are a few different things to consider when planning for women, and creating retirement future they can depend on.
One is that they often do not make as much as men, so they have less money they can put back and save up. Additionally, they take more time away from the workforce due to raising children and having other family commitments, so they typically make less money over their lifetime. Because of that, when they reach retirement age they do not have enough money to enjoy a good standard of living. With only 12 percent of women being confident that they can comfortably retire, it is clear that there is a serious problem with women's retirement options in the US today.
Forty-six percent of the women surveyed by the Transamerica Center for Retirement Studies say they are not confident at all, or not very confident, in their ability to successfully retire and have what they need to feel secure.
The average woman, who makes 84 cents to every dollar made by a male colleague, simply is not making enough in many cases to put a lot of money aside for retirement.
Many women are raising children on their own, as well, and a large portion of their income goes toward paying their bills and caring for their children. They may not have enough left over to put back for retirement.
Fortunately, there are ways that women can be proactive and start making financial moves that can help them with retirement. The first way to be proactive is to take a careful look at the Social Security benefits that will be received. Consulting a professional for financial advice can help, because a lot of women assume that Social Security will pay all of their expenses in their later years. That is often not the case, though, and it is especially true for women who have not made a lot of money over their lifetime. In general, Social Security benefits will pay around 60 percent of expenses for most people.
Underestimating how much is needed overall, and claiming Social Security benefits early, are two of the serious problems that women encounter. It is very tempting to take Social Security early and retire, but doing that lowers the potential lifetime income a woman will receive.
Retiring at 62 means a lower amount of Social Security, and retiring at 65 or even at 67 is much better financially if it is feasible for a woman to remain in her job for that length of time. Some jobs are easier for older people to continue in, while others may be too demanding as a person ages.
Remaining strategic about the earning power they have can help many women focus on avoiding a retirement crisis. When women plan to work until a particular age they need their health to hold out. But they also need to make sure they have the skills required to continue to do their job effectively. If they cannot perform their job duties the right way, and they do not remain relevant in the work force, they may find themselves forced out of the work they are doing and needing to retire earlier than expected. That can really harm their retirement goals.
Working with a professional on retirement planning is one of the best ways for any woman to reduce the chances of having a retirement crisis at a later date. That way it is possible to get the information needed to successfully prepare for retirement, and to take all of the potential issues into account. By addressing any issues that are already occurring, and finding ways to avoid potential future issues, it is possible to focus on retirement in a way that helps a woman plan adequately and feel more prepared for the future.
This content created by Rick in conjunction with Fusion Capital Management.