Research consistently shows women are saving far less for retirement than men, with potentially disastrous results. Consider, for instance, an analysis by the National Institute on Retirement Security that found women were 80 percent more likely than men to be impoverished at age 65 and above, while women age 75 to 79 were three times more likely to fall below the poverty level compared with men.
There are many reasons why women need special attention when it comes to retirement savings. For starters, women tend to live longer than men. A recent report from the Centers for Disease Control and Prevention notes the average life expectancy for women is 81.2 years vs. 76.3 years for men. This makes it even more critical for women to set aside adequate funds for retirement.
An additional challenge results from the well-known gender pay gap. Women generally earn between 77 cents and 79 cents for every dollar men earn, which adds up over time to a significant earnings differential. Women are also more likely then men to take time off during their childbearing years. These two factors create a significant retirement roadblock for women, and it is much harder for them to set aside funds for their later years—a problem only compounded by their longer life span.
While these problems are very real, they aren’t insurmountable. At Anderson Retirement Solutions, we frequently work with you to help you take charge of your retirement. We help you better understand your finances and educate you about ways to save more effectively. We also work closely with divorced women or widows for whom saving for retirement can be even more complex.
We generally encourage clients to set aside at least 20 percent of their income for savings. For some women, however, this won’t provide enough of a cushion, and we work with you to help you create a workable budget for your circumstances so you can maximize your savings.
It’s particularly important for women to understand the various Social Security claiming strategies and how these options can affect retirement security. According to a Nationwide Retirement Institute survey conducted by Harris Poll, women rely on Social Security or will count on it to pay, on average, 56 percent of all their expenses in retirement. However, 80 percent of retired women currently collecting Social Security benefits took those benefits early. This means they locked in a lifetime of lower income—a decision which could have dire financial consequences for them. It’s very important to weigh your options carefully before making choices you probably won’t be able to undo.
At Anderson Retirement Solutions, we understand the complexities that make it more difficult for many women to save for retirement. Our objective is to prepare you for a retirement that can last 30 years or more and help you meet your financial goals. Please don’t hesitate to contact us at 888.473.6931 if you’d like to discuss these important issues.