Retirement Planning is Different for Women

Virtus Wealth financial advisors > Retirement Planning is Different for Women

by | Sep 26, 2019

Watch Out Girls … Retirement Triple Threat!!!

Calling all women!  You face a retirement triple threat, and it’s not the good kind.  I hate to admit it, but retirement planning is different for women.  That said, it’s extremely important for women to be actively involved (whether they are married or not) so they can directly plan for the retirement triple threat that, by default, targets them.  So … what is the retirement triple threat???

1. Women make less

  • Women tend to be the primary care-giver for young children which reduces their time in the work force. This has a ripple effect on contributing to a 401k, missing employer matching, the benefits of compounding, and social security.
  • Women are also more likely to be the caregivers for their elderly parents, further affecting their careers and finances.
  • Let’s not forget the wage gap. A Pay Scale report found that women still make only $0.79 for each dollar men make in 2019.Again, the gap can affect women’s social security and pension benefits, as well as their retirement savings.

2. Women live longer.

  • The average American woman is expected to live about five years longer than the average man (81.3 years vs. 76.3 years), according to the Kaiser Family Foundation.This means that nearly every woman will have sole responsibility for her finances at some point, and understanding the income stream is important. If a woman becomes divorced or widowed, knowing and planning for the effect on social security, pensions, and taxes is vital.
  • Living longer also means that women can expect to pay more in healthcare costs. A single woman retiree would need $150,000, and a single man would need $135,000, according to the 2019 Fidelity Investment’s annual Retiree Health Care Cost Estimate.
  • Because women live longer, women also have higher rates of disability and chronic health problems. Thus, women are far more likely to need long-term care. Women spend twice as many years in a disabled state (as men) at the end of their lives: 2.8 years if they live past 65, and 3.0 years if they live past 80.  More than 70 percent of nursing home residents are women.  Their average age at admission is 80*.

3. Women invest differently.

  • Women are more risk-averse. According to Ellevest, an investment platform created by women for women, “of all the assets controlled by women, 71% is in cash – aka not invested.” Statistically, women are less likely to invest, and even those who do invest tend to wait until they are older to start.
  • According to a study by Merrill Lynch, 41% of women wish they invested more of their money.

In summary, women need to be actively involved in their financial planning to reach their finish line in style.  Clearly, there are issues to overcome, but the triple threat can be addressed with a focus on the end in mind.   At Virtus Wealth Management, we partner with our clients to develop a personalized financial strategy to give our clients a better sense of security of their financial health knowing that the issues like the ones mentioned above have been fully addressed.

Make 2019 the year you take control of your financial future.

*2018 American Association For Long Term Care Insurance article “Important Information For Women”

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. All investing involves risk including loss of principal.

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