“In the past, women tended to rely on their husbands for financial stability. These days, though, a woman has to look out for herself.”
No woman wants to imagine how her life might change in the event of death or divorce. However, a third of widows lose their spouses before age 60, and half before age 65, according to a study by the Women’s Institute for a Secure Retirement.
New Hampshire Business Review’s recent article, “Why retirement planning is so important for women,” details two of the reasons that retirement planning is so critical for women:
Women Still Have a Late Start. Despite more gender equality, women still do the majority of childcare. Some women can balance home and work life, but many mothers leave jobs or reduce their hours to care for their children. That means a reduced or no income, making saving for the future difficult. A Society of Actuaries study found that caregivers who leave the workforce lose an average of $303,800 in lifetime earnings.
They live longer. Women outlive men by an average of five to six years, so their financial requirements exceed those of men (they tend to spend more years in retirement). As the Society of Actuaries noted, the average woman spends more years experiencing some form of disability. With healthcare costs rising, planning for disability care is critical to women.
Here are some retirement planning tips:
Organization: Keep a list of account numbers, logins, balances, and other important records, in case of a life-altering event. It will allow you to easily determine where you stand. Consider how your income might change due to the loss of your spouse. If you have a pension, look at the survivorship payout, so you’ll know what to anticipate for added income.
Control: If you’re single or preparing for that possibility, take responsibility for your finances. Start financial planning and save for retirement now. Start regular 401(k) or IRA contributions or increase contributions to receive your employer’s match. You should also start saving funds for emergencies. As a woman, you can’t save too much.
Estate Planning: A widow can suffer the pain of losing her spouse, and then get another shock when she sees she doesn’t have an estate plan in place. In addition to an estate plan, draft medical and financial powers of attorney, so a trusted person can make decisions for you, if you’re incapacitated. It is also recommended that you add designated beneficiaries to your accounts and correctly title your property.
Women have a much tougher time with retirement than men. However, with some effort and planning, you can be sure that your senior years are happy.