Are You Facing A Retirement Income Shortfall?

Are You Facing A Retirement Income Shortfall?

Core Facts

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According to a study by TransAmerica women are far less confident of their ability to retire with a comfortable lifestyle. The same study shows that most women are planning to retire at 65, or not at all, continuing to work into their retirement years. 

There are many reasons why women, on average, are more likely than men to face a retirement income shortfall:

  •  Women's careers are often interrupted to care for children or elderly parents.
  •  They may spend less time in the workforce, and are more likely to work part-time.
  •  As a result their retirement plan balances and Social Security benefits are often smaller.
  •  Women tend to start saving later in life and invest more cautiously than men, which compounds the problem.

And because women tend to live longer than men, their retirement assets may need to last longer. Another interesting fact is that women on average are guessing at their retirement needs, rather than using a calculator to determine how much exactly they’ll need. 

Save more, spend less now

Save as much as you can. Take advantage of IRAs, employer plans like 401(k)s, and annuities, where investment earnings can potentially grow tax deferred (or, in the case of Roth accounts, tax free). Utilize special "catch-up" rules that let you make contributions over and above the normal limits once you've reached age 50. If your employer matches your contributions, try to contribute at least as much as necessary to get the maximum match--it's free money.

Delay retirement

One way of dealing with a projected income shortfall is for you (or your spouse, or both of you) to stay in the workforce longer than you had planned. This may allow you to continue supporting yourself with a salary rather than dipping into your retirement savings.

Delaying retirement might allow you to delay taking Social Security benefits (which may increase your benefit) and/or delay taking distributions from your retirement accounts. The longer you can delay tapping into your retirement accounts, the longer the money will last when you do begin drawing down those funds. Plus, the longer you delay retirement, the longer you may be able to contribute to an employer-sponsored retirement plan, or earn additional pension benefits.

While you might hesitate to start on a new career path late in life, there may actually be certain unique opportunities that would not have been available to you earlier in life. For example, you might consider entering the consulting field, based on the expertise you have gained through a lifetime of employment.

Reevaluate your expectations

If your projected income shortfall is severe enough or if time is too tight, you may realize that no matter what measures you take, you will not be able to afford the lifestyle you want during your retirement years. You may simply have to accept the fact that your retirement will not be the jet-setting, luxurious, permanent vacation you had once envisioned. 

As a woman, you face special retirement planning challenges, but with careful planning, you'll hopefully be on track to a secure, fulfilling retirement.




Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC


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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website:

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Jake Mendlinger
Account Manager
516.829.8374 X 232

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