Planning for retirement as a woman comes with many different hurdles and considerations that aren’t always addressed in the mainstream media. The truth is that retirement planning isn’t a one-size-fits-all solution.
Women retirees often need to plan for a larger savings that matches their longer lifespans, the financial toll that caring for aging parents (or adult children!) can take on their savings, and more. Let’s talk about what it means to be financially secure as a retired woman – and how you can plan for a fulfilling retirement!
Plan for Longevity
Most women live notably longer than their male counterparts, sometimes as much as 8% longer. That may not sound significant, but those extra years can add up. This is especially true when you’re trying to plan for a retirement that remains fulfilling (and financially stable) for the entirety of your years as a retiree.
Some women are able to combat the financial strain that a longer lifespan puts on their retirement cash flow by simply saving more before they retire. However, it may be in your best interest to work with a financial planner who specializes in working with women transitioning to retirement. Together, you and your financial planner can put together a unique plan that accounts for longevity while still giving you the flexibility to use your wealth for your other lifestyle goals during retirement.
Have a Plan For You – Not Just As Part Of Your Partnership
Many couples plan for retirement together. This is a very normal part of the retirement process. Each of you likely has a workplace retirement account and are making additional contributions to a Traditional or Roth IRA, or another investment account.
You’ve sat down together to plan out retirement spending, budget, and savings goals. You may have even planned your Social Security and pension plan options around one another.
However, because many women outlive their spouses, it can be problematic to only plan for retirement with your significant other. You may end up living for a significantly longer time, and your spending needs may be different.
Part of putting together your retirement plan is to plan with your spouse, but also to plan for each of your own contingency plans in case you find yourself on your own for some of your retirement years. This means thinking about your potential medical costs, living situation, expenditures, and more.
Where Will You Live?
Most assisted living communities have a 7:1 ratio of women to men. This is often because women outlive their spouses or partners, and may live long enough that they’re unable to live on their own any longer. Assisted living can be incredibly expensive, but the good news is that you have options. There are a wide range of different assisted living choices available to you as you age, including:
- Living with a child, or family member
- Independent living, or a senior living community
- Assisted living housing
- Skilled nursing facilities
- Continuous care retirement communities
There are also some senior living or assisted living communities that have specializations – like memory care. Thinking through where you want to live if you can no longer live on your own can feel nervewracking. However, you can also view this as an exciting exercise. By planning in advance, you can give yourself the financial flexibility to live in a way that makes you happy well into your golden years.
Think About Any Obligations You May Have
All too often, women who are nearing retirement find themselves facing a challenging life transition:
Just as they’re gearing up to retire in the next 5-10 years, they find themselves caring for their own, already retired, parents. Alternatively, they might find that their adult children are taking a notable amount of their time, energy, and resources.
Either of these family obligations can be a drain on your existing nest egg, and your ability to continue saving during the critical pre-retirement years. Planning for these potential obligations in advance can help you figure out how you’ll cope financially with the extra expenses of being a caretaker.
Working With a Professional
Although these considerations may seem like enough, they’re just a handful of the potential financial roadblocks that women face when planning for retirement. Divorce, an earnings gap, potential career disruptions, and the health concerns that come with living longer are all additional problems you may deal with over time. Working with a fee-only financial professional can help you create a plan that prioritizes financial security, and takes the unique challenges you’re facing into account.