3 Retirement Roadblocks for Women – and How to Get Around Them

Women need to plan for an independent retirement. Statistically speaking, women live longer than men.¹ U.S. census figures show that 59 is the median age of widows. So, a widow can anticipate another 25 or more years of living and retirement expenses. 

Regardless of status, women need to have a savings and income plan for retirement. However, many women are not taking the planning steps to secure an income during their post-working years.

Today’s women earn more and are likely to be a major contributor where living expenses require two incomes. However, they face formidable competing financial priorities, as evidenced in a 2018 Transamerica Center for Retirement Studies ("TCRS") survey which found that almost seven in ten women (68%) named paying off debt as their top financial priority.   In contrast, only 51% of the women included retirement planning as a priority.² That same study found that only 12 percent of working women are confident that they will be able to retire comfortably.

Three Retirement Roadblocks for Women 

In addition to living longer, there are challenges and roadblocks for women in planning for retirement.  They include the following:

1. Women frequently put others first

Women often underfund or undermine their retirement savings plans through concern and putting the needs of their family first. The spouse or partner has expensive hobbies. Growing or adult children have college expenses. Elderly parents may require ongoing financial support. The money earmarked for the IRA or money market fund always seems to go instead for the family’s needs.

There are alternatives to stalling the retirement savings plans. They include just saying "no" and knowing there are other resources — school loans, for example. Life is about balance, and the woman needs to include herself more in the balancing act.  

2. Women Are More Likely to Earn Less Than Men

Women earn less than men for a variety of reasons. For instance, women are more likely than men to miss work to care for children and their elderly parents. The family Caregiver Alliance cites studies estimating that 66 percent of caregivers are women.³ Significantly, the “average caregiver is a 49-year-old woman who works outside the home and provides 20 hours per week of unpaid care to her mother.”  

So, the foregoing means that caregivers who are women spend about 50 percent more time than their male counterparts. It is time away from work that decreases, derails, and delays retirement savings.

3. Many Women Lack a Plan for Retirement

According to the same TCRS retirement report, almost half (45%) of the women surveyed did not have a retirement plan or strategy, compared to 29% of the men, and  another 44% of the women stated that they had a plan but it wasn't written down.²   

It may be stating the obvious, especially given the conflicting financial priorities that women face,  but every woman needs her own retirement strategy about her retirement income needs, costs and expenses, and risk factors.  Becoming more financially literate can take you some of the way, but this type of knowledge is acquired gradually through study and experience.  Depending on your time frame, you may want to "jump start" the process, by reaching out for expert financial advice to determine what you need to do to secure your financial future.    

11 Tips to Get Around Retirement Roadblocks

In the face of the foregoing and other obstacles, women who are willing to take the right steps can go a long way to achieving a secure retirement. The 2018 TCRS Retirement Study shares 11 tips that women can act upon to take control of their retirement.²

1. Create a budget that includes income, living expenses, paying off debt, and financial goals such as building short-term savings and long-term retirement savings.

2. Start saving for retirement early and get into the habit of saving on a regular, consistent basis.

3. Consider retirement benefits as part of total compensation when evaluating employment opportunities.

4. If your employer offers a retirement plan, participate. Take advantage of employer matching contributions, if available. Consider making catch-up contributions if you are age 50 or older.

5. Develop a retirement strategy and write it down. Envision your future retirement and use an online calculator to estimate your long-term savings needs. Then formulate a goal for how much you will need to save each year – and hold yourself accountable for saving.

6. Carefully consider the financial trade-offs and options when facing life’s important decisions about whether to reduce work hours or take time out of the workforce to be a parent or caregiver.

7. Maintain your ability to continue working past age 65. Keep your job skills up to date and in step with employers’ needs.

8. Become personally involved in your family finances ranging from daily budgeting to long-term planning. Discuss retirement saving and planning with family and close friends.

9. Get educated about retirement investing. Learn about possible ways to help make savings last longer including when to take withdrawals from retirement accounts to minimize taxes and penalties, and the best time to start Social Security to maximize benefits.

10. Have a backup plan in the event of unforeseen circumstances such as separation, divorce, loss of a partner, or being unable to work before your planned retirement. Consider emergency savings, insurance products such as disability insurance and life insurance, and possibly ways to cut costs if needed.

11. Take good care of yourself and safeguard your health.

Women don’t have to feel alone when it comes to planning for a secure retirement. Hopefully, you find the advice given above "food for thought" and actionable.  Certainly, feel free to contact us if you need assistance in helping you craft a more secure financial future.