In today’s episode of the Women’s Retirement Radio podcast, I cover 6 Retirement Planning Considerations for Women.
- Family is often the primary concern
- Women are often caregivers
- Women don’t always look out for themselves
- Women may find themselves alone
- Women business owners
- Charitable giving
While the list above isn’t exhaustive, my hope is it will give you some things to think about as you plan your unique and personal retirement.
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Hi there, and welcome to another episode of Women’s Retirement Radio Podcast. I’m your host, Russ Thornton, and in this podcast we talk about retirement issues and financial considerations affecting women in their 50s and 60s as they look forward to retirement or the next chapter of their lives.
Today, I want to talk about six retirement planning considerations for women. And certainly there’s more than six, but I wanted to focus on six today that I think are often unique to women, and offer some specific considerations that might be specific to women in their situations as they think about and plan for the future.
So again, we’re talking about six retirement planning considerations for women. The first is family is often the primary concern. If you’re a woman listening to this, this probably won’t come as a surprise to you. But the women that I meet with and work with, that I have financial planning relationships with, they often share with me that their first and foremost priority is their family. And that could be a husband, that could be their parents, siblings, their children, their grandchildren, or all of the above. But it’s almost universal that in our discussions, in our planning, in our decisions, in our exploration of their options, and choices, and trade-offs, family comes up again and again. And to be more specific, I often find that women are concerned about relationships and how they change and evolve as their family goes through time, as their children get older, or as their children have families of their own, or as their mom and dad get older, and require support and assistance, in its different forms.
Women also often share with me that they don’t want to be a burden on their families. And they’re typically speaking about their children. They don’t want to be a burden on their children. They don’t want to find themselves in a situation where they have to rely on their children for financial or physical support or help as they age, which is interesting because a lot of these women who are in their 50s and 60s, those are the women that I most often work with, they’re dealing with those very same issues themselves. They’re helping their parents who are in their 70s or 80s or older deal with everything from dementia and cognitive challenges to physical challenges as they age. Sometimes even financial issues, and we’ll talk a little bit more about that in a moment.
Ultimately, I find that women want… they want everybody to get along, to be happy. They, I think, often think of themselves around the dining room table at Thanksgiving, or Christmas, or another family get together, and I think they just envision everyone being present, and being there, and engaged, and happy to be there. And I don’t have to tell you, that’s certainly not always the case, or it’s easier said than done. But I think ultimately this idea that family is a primary concern is a consideration because you need think about, as you’re planning for your retirement and how you’re going to age, you need to think about the other family members that might impact your personal plan. And that can affect everything from where you live, or where you retire to, because you might need to be closer to family that needs your support. You might need to think about setting aside some additional funds to support family in different forms and fashions. There’s just a lot of additional retirement planning issues that your family can introduce, and I think it’s important to acknowledge that and factor that into your planning, especially since family is, again… For many of us, family’s everything. And for many of the women that I speak to and work with, it’s one of their primary motivations and priorities in their lives.
So, of the six retirement planning considerations for women, the number one is family, which is often their primary concern, or their primary goal or motivation.
All right, number two is women often find themselves as caregivers. And again, this also relates to the family being a priority, but women as they age, especially as they get into their 50s and 60s, kind of the pre-retirement/retirement years, they can often find themselves in a situation where they might have to be helping out with an aging parent or aging parents. They might need to help out with their adult children or grandchildren. They might have a husband that is dealing with health or other issues they might have to help out with. And whether they choose this role or not, oftentimes the caregiver role often falls to the woman: the adult daughter, the wife, the granddaughter, the grandmother. All the different roles that you may be playing in the lives of your family and other people that you care about.
And again, this introduces some additional considerations that should be taken into account in your retirement plan. But it also expands beyond your retirement plan. For example, if for whatever reason you are the primary guardian or caretaker for a grandchild or grandchildren, what happens to them if something happens to you? You need to make sure that you have an estate plan that designates a successor guardian who can step in and take care of the grandchildren if you’re not able to, at least until they reach age of majority and are legally adults.
The form of caregiving can take on a lot of different roles. For example, you might need to help your aging parents make sure they get their bills paid on time. You might need to help coordinate in-home care, or therapy of different forms, if they’re recovering from a fall, for example. It can be different levels of healthcare or financial assistance. It can really just be emotional support: just visiting and make sure that they’re taking care of themselves, that their health is good, because as we all know, many of our parents come from that generation where they just kind of bottle things up and they don’t share with us.
So, it’s important for you to think about and plan ahead for your potential role as a caregiver, whether that’s for your parents, a spouse, your children, your grandchildren, or perhaps all of the above. So, that’s number two.
Number three on the list of six retirement planning considerations for women is women don’t always look out for themselves. And again, you’ll probably see now these are largely related, at least these first three. I’ve found that women sometimes as so focused on others that they sometimes forget about their own best interests. They’re so motivated to take care of others, either by choice or because they’ve kind of fallen into that role, that they sometimes jeopardize their own financial or retirement planning situation.
The analogy or the story that I often relate to the women that I’m talking to is the oxygen mask drill when you take a commercial flight. So, if you’ve flown commercial, and I’m guessing most of you have, the preflight safety demonstration where the flight attendants, or these days it’s usually on a video monitor, but they talk about “In the event of loss of cabin pressure, oxygen masks may fall from the ceiling above you.” And the important part is they always tell you to put the mask on yourself first before helping others. So, even if you have young children, they say put the oxygen mask on yourself first before helping others. I think that analogy especially holds true when we’re talking about the idea of how women sometimes neglect their own interests in the pursuit of helping others.
And this raises some of the same questions we’ve already talked about. What happens to those other people that you’re caring for if something happens to you? Many women like you tell me you don’t want to be burden on your children or on your grandchildren; but what happens to them if something happens to you, and you’re no longer in a position to be able to support, care for, help them in the ways that maybe you’ve been doing for months or even years of time?
So, I think that it really begs the question, while I appreciate and understand your desire to take care of others, and while that’s maybe your sole priority in your life, make sure you don’t do that while neglecting your own needs, your own retirement, your own planning, your own lifestyle. Because you need to make sure that you’re taking care of yourself so that you can better take care of others.
This spills over into things like maybe looking at disability. If you’re working, either full-time or part-time, and you are incapacitated, can no longer work, can no longer earn your income, well then how are you going to be able to care for others if you don’t have income coming in to take care of yourself? So, if you don’t have adequate disability coverage, disability income coverage, which replaces your income, at least part of your income if you’re not able to work for a period of time, that might be something to think about if you haven’t addressed that already.
Longterm care insurance is another area to think about, where as you age yourself, especially if you’ve gone through this with your own family or your own parents, and they’ve been in a longterm care need situation where they’ve needed in-home care or skilled nursing care, either at home or in a nursing home, if you’ve experienced that firsthand you know how expensive that can be. You might also be familiar with how that can drag out over not just months, but sometimes years. And so, that’s something that you might want to think about, making sure you address for yourself. If you don’t have the financial capacity to self-insure those potential needs in the future, longterm care insurance, while expensive, is perhaps an alternative that you should consider.
And to be clear, I don’t sell insurance of any kind, but I do work with my clients and other professionals to help them identify the need and get the coverage they need, if and when they need it. So, it’s things to think about.
Number four on the list of six retirement planning considerations for women is women may find themselves alone. With the ever-present rate of divorce, with the actually increasing rate of divorce for those above the age of 50, you may be happily married today, but you may find yourself on your own in the future. If you’re a woman, you are likely to outlive your spouse, and that’s just based on life expectancy and mortality tables, but women typically outlive their male counterparts.
So, at some point in the future, you’re likely to be on your own, either by outliving a spouse, or through divorce, or through other means. You may be on your own already. Maybe you’ve never been married, maybe you’ve made that choice, but that also introduces some additional planning considerations with regard to retirement and things like that.
Think about retirement planning, and how are you going to support yourself when you do retire, when your income, when your paycheck’s no longer there? How are you going to support yourself?
And again, none of these six considerations are mutually exclusive of the others. So, if you’re thinking about planning for yourself, and recognizing that you may be alone at some point in the future, think about the fact that you may also need to be caring for others, or thinking about your family dynamics and how they may change if you go through a divorce. How might that change your relationship with your children, even if they’re adults and have families of their own?
So, think about your retirement planning from those perspectives to make sure that you can have a comfortable, confident lifestyle, live the life that you want to live. And if that lifestyle includes caring for and taking care of others, then plan for that, and make sure that you factor that into your planning.
Also think about your estate planning. If you find yourself on your own, you don’t have a spouse or a partner that can help care for you in the event that you have a short or perhaps even a longterm healthcare need, is that burden going to fall to your adult children? Again, as I’ve already identified, many women like you tell me that you don’t want to be a burden on your family, or especially a burden on your children. So again, something to think about.
And recognize that whether you’re… find yourself on your own in the future, or if you’re on your own today, you need to be flexible and think about how you can easily make changes and adjustments to your plan and to your decision-making along the way. I think the ability to think and act nimbly, to be flexible and adjustable, will serve you well as you’re planning for your retirement years and beyond.
I’m going to cover number five and number six here pretty quickly. These are maybe a little less prevalent, but still introduce some interesting retirement planning considerations if they describe your situation.
So, if you’re a woman business owner… So, this is number five on our list of six retirement planning considerations for women. If you’re a business owner, that introduces another set of considerations. And whether you are an enterprising entrepreneur who is building, or has built, a significant, growing enterprise, or whether you have a part-time hobby or side hustle, and you make and sell things on Etsy, it’s something for you to think about because it introduces additional potential risks. Everything from liability to additional insurance lines, or insurance coverages that you might want to cover for yourself. You might need to think about, if you own or have equipment that needs to be replaced from time to time, have you factored that into your retirement planning budget?
Thinking about succession planning. If you’ve built a business that has employees, that involves others beyond just yourself, what happens to the organization? What happens to your associates and employees if something happens to you? Do you have a succession plan in place? Both if you were to die unexpectedly, what happens? How does the business transition or continue on without you? And secondly, what happens if you want to exit the business at some point? Maybe you want to take a step back, and back away from the business, either in part or perhaps in whole. Maybe you want to sell the business, and reap the rewards of your hard work that might have been over decades. And so, think about those things.
What happens if, again, you’re incapacitated? What if you are alive but can’t work full-time? What does that do to your business? What does that do to your clients and customers? What does that do to your employees and associates? And what does that do to your income?
So again, we could probably spend an entire episode just talking about business considerations for women business owners. But if you’re thinking about retirement and you own a business, whether it’s a small business or something larger, it introduces some other things to think about.
And finally, number six on our list is charitable giving. So, in my experience, a lot of times women are more charitably inclined than men. Now clearly there are exceptions, and I’m speaking in generalities here, but many women are more charitably inclined. And I think a lot of people naturally associate charitable giving with having a lot of money and giving a lot of money away. I think you might think of someone like Bill Gates or Warren Buffett. But giving can be tithing to your church; it can be volunteering; it can be giving $10 here, $20 there. It’s not correlated to how much money you have; it’s really about your inclinations, your personal motivations, and desire to give.
And again, I think this ties back to some things we’ve identified and talked about earlier, which is your desire to make an impact and care for others. Perhaps to leave a legacy. And I think this is just kind of a behavior that I’ve found repeats in women across a lot of disciplines, whether that’s caring for your family, or caring for your community, or other organizations, or other entities that are important to you.
This introduces some interesting planning opportunities because whether you’re thinking about planning for while you’re alive and how you can plan for and utilize charitable giving to perhaps save on taxes, or to think more strategically about how that has a role in your retirement planning, or you can also think about charitable giving that happens after you’ve passed away, after death. So, charitable giving can be part of your estate planning. So, when you outline where you want your money to go, how you want it divided. And again, we don’t have to be talking about millions of dollars here. This could be you have a home and you want to… Once you pass away, maybe you want to sell it, and you want to have the proceeds of that home divided among your living children and grandchildren, and you want 10% of the proceeds of your home sale to go to a charity, or multiple charities.
So, there’s a lot of ways to factor charitable giving into your retirement planning, as well as perhaps into your estate planning, if that’s something that’s important to you. And I’ve found that for many women that I work with, charitable giving is important.
So, let’s quickly review the six retirement planning considerations for women: Number one, family is often a primary concern, if not the concern. Number two, women are often in a caregiver role. Number three, women don’t always look out for themselves. Number four, women may find themselves alone. Number five, women business owners have some additional considerations and decisions to think about and make. And number six, women are often interested in charitable giving, and that introduces some additional planning opportunities and decisions as well.
Again this is not a comprehensive list. This is certainly not meant to address all of the retirement planning considerations that women should think about, but I hope this has introduced some ideas for you to think about in your own retirement planning.
If you have any questions about any of these, or would like to discuss them, please get in touch. You can do that at wealthcareforwomen.com/contact. You can reach me several ways via my website. You can also go to my website, and there’s a little button on the right-hand side of the page where you can click and actually leave me a voicemail if that’s easier.
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Before I go, some quick disclosure language: You should consult a financial advisor familiar with the specific circumstances of your unique financial situation before making any financial decisions. Nothing in this broadcast constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature, and are not a guarantee of future returns. I’m a financial advisor, a certified divorce financial analyst, and an investment advisor representative of Wealthcare Capital Management LLC, an SEC registered investment advisor based in Richmond, Virginia. The views discussed in this podcast are my own, and may not be consistent with or represent those of Wealthcare Capital Management.