Retirement Planning for Women
Women outlive men by three to four years on average, and as a consequence, they represent a majority of older Americans. They have fewer years of work on average and lower earnings.
At age 65, average life expectancy is 18 years for American men and 20 years for women. Approximately 30% of women and 20% of men will survive to age 90. National survey data and simulation studies suggest that middle income households have not saved enough to meet all expected retirement expenses.
As with most things in life, retirement planning is slightly different for women than it is for men given the many challenges they face. To meet these financial challenges, women need to make retirement planning a priority.
Start saving now!
To help improve the chances of achieving a comfortable retirement, start with a realistic assessment of how much you'll need to save. If the figure is substantial, don't give up. The most important thing is to start saving now. Although it's never too late to save for retirement, the sooner you start, the more time your investments have to potentially grow.
If there is a retirement savings plan, such as a 401(k) offered at work, join it as soon as possible. Contribute as much as you can. Contributions are deducted directly from pay, and with an employer matching your contributions, you’d be wise to take advantage of that.
Even if a woman chooses to stay at home to raise a family or works part-time, she can and should continue to save for retirement.
Unfortunately, it is a realistic concern for many women that they will outlive their retirement savings. So what can you do to help ensure you'll have enough income to last throughout retirement?
Here are some tips:
Estimate how much income you'll need. Use your current expenses as a starting point, but note that your expenses may change by the time you retire.
Find out how much you can expect to receive from Social Security, pension plans, and other sources. What benefits will you receive should you become widowed or divorced?
Set a retirement savings goal that you can work toward, and keep track of your progress.
Save regularly, save as much as you can, and then look for ways to save more - dedicate a portion of every raise, bonus, cash gift, or tax refund to your retirement savings.
Consider how you can help protect yourself and your family from potentially substantial long-term care expenses. By planning ahead, you could help preserve your choices for care and may avoid becoming a burden on your family.
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