Do women need to plan differently for retirement than men? Definitely.
Women are faced with numerous conflicting factors when retiring. On average, women will live 7 years longer than men, yet only earn an average 76% of a man's salary. Combine this information with the increased rates of divorce and the fact that many women take time off to bear and raise their children, on average most women earn a mere 50% of what their male counterparts receive in retirement allowances.
It's a scary picture that I'm painting, I agree. But there are ways to make sure every woman retires in style. What follows are four concrete suggestions to get you started on the road to a healthy, happy, and financially rewarding retirement:
Plan to Save More for Retirement Then Your Male Counterparts
Retirement planning experts often advise to save approximately 10% of your income in order save enough for retirement. Women, however, might want to bump up that number to 12% instead. Few women will be able to earn the same retirement pensions as their male counterparts for the reasons already explained. Additionally, the social security only factors in the most recent thirty-five years of employment into their calculations. Therefore, for those women who were out of the workforce for more than seven years to bear or raise their kids will get an income of zero for those years, and their overall pension amount in turn will be reduced dramatically.
Participate in as Many Retirement Options as Possible
If your employer offers any sort of investment and savings strategies such as 401K plans or savings matching programs, take advantage in as many as you are eligible for to boost your retirement savings even further. Talk to your local HR representative for starters to learn more about what your organization does.
Learn About Investments and Invest Where Possible
Although women need to be more careful than men in general because of the higher risks involved with less retirement funds available, it would be wise to invest wherever possible in things that offer a higher than normal return. This suggestion goes hand in hand with the next one as well.
Get Help From the Professionals With Your Retirement Planning
Women in general need to take their retirement planning by the horns and understand exactly what is needed to ensure long-term success. To do this, get advice from the professionals as much as possible and as early as you can manage so as not to rush into something without enough forethought. Tax planners, investment specialists and accountants are all excellent options.
