Helping women pursue their unique retirement needs

When it comes to investing for the future, women face unique concerns related to work patterns, longevity trends and the wage gap. A sound financial plan can be designed with the goal to successfully surmount these obstacles and enable women to pursue a more comfortable, secure retirement.

Retirement planning obstacles women face

1. Women spend an average of seven years out of the workforce caring for children or elderly relatives. These lost working years can lower Social Security benefits and reduce the amount accumulated in employer retirement plans.
2. The wage gap results in women earning less, on average, than men.
3. Women live an average of six years longer than men, meaning that their retirements are usually longer than that of men the same age. Because of this longevity, a married woman is likely to experience a partial depletion of retirement savings for the healthcare and end-of-life expenses of her spouse.
4. Despite studies showing that the majority of women take an active or leading role in managing their family’s finances, outdated stereotypes about women and money management can undermine women’s confidence in their own financial skills. We wrote about ways to combat this so-called confidence gap earlier this year.

Retirement planning strategies for women

So what is a woman to do when faced with these obstacles? First, don’t despair. The disadvantages above are not unsurmountable. A sound financial plan can be created with the goal of combatting and overcoming these obstacles. 

Talk with a financial consultant. As with any goal, professional advice when it comes to saving for a comfortable retirement may make it more likely that your efforts will be successful. And professional financial advice doesn’t have to be expensive, either. Many financial consultants – like those on Alliant’s Retirement and Investment Services team – offer a no cost, no obligation consultation so you can gauge where you are currently and what strategies may help you improve your financial situation.

Account for longevity via diversification. Consider whether a woman’s – or a married couple’s – retirement investment mix should be different to account for the longer life expectancy of women. 

• A woman may want to delay the timetable of her transition to more conservative investments as she approaches retirement. 
• A woman may be a better candidate for an annuity as a hedge against the danger of outliving her retirement savings. 

Ongoing steps. There are some ongoing actions you can take to help ensure your retirement security. 

• Actively participate in retirement plans offered by employers, especially those that offer matching contributions. 
• Continue to take an active role in family financial decisions. 
• Seek out opportunities to learn about investment vehicles and options so the “confidence gap” doesn’t stand in the way of your pursuit of a secure and comfortable retirement.