Guest post by Rick Pendykoski. Rick is the owner of Self Directed Retirement Plans LLC, a retirement planning firm based in Goodyear, AZ. He regularly blogs at MoneyForLunch, SocialMediaToday, NuWireInvestor & his own blog of Self Directed Retirement Plans where he focuses on retirement planning, investment, securing future related topics.
The never ending battle of proving men superior over women, or vice versa, doesn’t seem to be nearing a probable solution any sooner. Although it is a well-established fact that women have proven themselves equal to men in many instances and have given an equal level of competition to men in every probable aspect of life, they still seem to have a distinct disadvantage in comparison to men when it comes to retirement planning.
Women Live Longer
As per a latest research, the average life expectancy of a normal woman, retiring at the age of 65, could be stretched to her 85th birthday, or even longer, provided that all the financial concerns are good and properly paid for through the right retirement planning and investments. Women might be able to outlive their husbands, but this combination of living longer and on their own only adds up to saving more for retirement than what men do.
Personal vs. Family Needs
Women often think of money as a family thing, rather than a medium for satisfying their personal needs. It is a good thing to put the family first, but not always, especially in the matters of work and retirement. Moreover, though women actively participate in activities to support family finances, they are likely to leave their jobs for raising kids or looking after an elderly family member. This necessarily points out towards fewer work years, less number of promotions and lower earning, as compared to their male counterparts, thereby resulting in insufficient funds to save for retirement.
As compared to men, women tend to receive less social security benefits over a period of time. These benefits are mainly calculated on the basis of highest earnings of an individual with 35 years of service. If a woman doesn’t have this number of years registered in the workbook, the social security administration tends to add zero-earning years to her record. This certainly lowers the figure of average monthly income and definitely results in fewer benefits for the women who haven’t worked for a period of 35 years.
Apart from this, the pension received by women also depends on whether they continue to work or not. Unfortunately, with more and more women leaving the present day workforce to deal with other priorities of life, their pension plans are simply incapable of doing the trick. According to a recent study, women receive only 54% of what men usually get as pension, which kicks them further behind in the race.
Considering the aforementioned factors, it’s time that women focus on their personal concerns, chalk out the things that are unique to them and formulate a proper plan for their retirement. Not surprisingly, there are certain things, common to both married as well as unmarried women, which can help them build an ideal retirement portfolio for themselves.
• Prioritize retirement plans when working.
• Increase the time-span at work, while drawing highest salary possible.
• Understand the implications of divorce and remarriage on social security benefits.
• Recognize the unique challenges and start saving or investing early.
• Learn more about the existing retirement plans offered by the several companies and the other investment vehicles suitable for retirement planning.
It is certainly a good piece of news that women have better life expectancy than men and they are likely to enjoy more retirement days. However, it is only possible if they take their unique challenges into consideration and start saving more through ideal retirement plans. It is only a matter of time when women would level men in terms of retirement planning and a better post-retirement life.