Amber Kelly • Apr 8, 2020
Who Runs the World?
Beyonce knows what I’m talking about. And in our previous post, when we discussed the sad reality that despite women still being the sole responsible gender for raising families, i.e., raising our future, women more than men are finding themselves struggling in their retirement years.
“Strong enough to bear the children, then get back to business,” she sings. But the problem is that unless you are Beyonce with her multi-million dollar salary and billion dollar marriage and enterprise, getting back to business is harder than it sounds.
And that is one of the key ingredients to saving for retirement: working.
The bottom line is that women live longer, earn less and have less time in the workforce to earn the smaller income. And while that may not be right by any means, it does mean that women need to think about planning for retirement differently than men.
When it comes to financial planning, here are a few tips specifically that women need to put at the top of their list.
- Start now. This goes for both men and women. The sooner you start, you sooner compound interest can get to work on multiplying your savings. For women, this is a big incentive because even if you start out saving less, the additional time your money is invested makes it grow even more.
- Save more. According to the data research company Payscale.com in its annual gender pay gap analysis, women’s wages in comparison to men’s increased in 2020, to 81 cents for every $1 a man makes, up four cents from the previous 77 cents. It’s a step in the right direction, but still, a minute step. Therefore, even as women make less, they need to save more to account for their anticipated longer lifespan.
- Plan for health care. Living longer means higher health expenses. The longer an individual lives, the more likely they are to have costly health issues. While unpleasant as it may be to consider this, you will be glad you did. Consider long-term care insurance or working longer with covered benefits to cover those costs.
- Save for yourself. If you have a spouse, do not rely on his/her retirement funds to cover your own. Again, it may not be rosy to think of losing a spouse, either by death or divorce, but things happen and it’s important to make sure you are taken care of. Women spend so much of their time taking care of everyone else, it would be tragic to not take care of yourself first.
It’s important for women especially to consider their individual situations when planning for retirement. It’s also imperative for them to find a financial advisor who does so as well.
PayScale.com. March 31, 2020. “The State of the Gender Pay Gap 2020.” https://www.payscale.com/data/gender-pay-gap. Accessed Feb. 18, 2021.
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