Women and Retirement Readiness
Three tips to help offset some unique challenges and boost retirement readiness.
It's no secret that women tend to live longer than men. The Social Security Administration reports that a man who is 65 years old today can expect to live, on average, to age 84.3 and a woman who is 65 can expect to live nearly 2.5 years longer, to age 86.6.1
Of course, longer life expectancy is a good thing, but it also means that women need more retirement assets than most men. Despite this, according to a recent study, a combined 51 percent of women, compared to 39 percent of men, think they'll need less than $250,000 for retirement. In contrast, more men than women believe they should save $500,000 or more.2
Understanding the need to save more is crucial, but women face other headwinds that can make that task more challenging.
For starters, women generally tend to earn less than men over the course of their careers, which can leave them with less to save for retirement.3 Many women step away from their careers to raise children or tend to loved ones. This can impact a woman's ability to maximize any employer matches on retirement plan contributions. And, because government benefits are tied to a worker's pay, these factors may also result in smaller Social Security benefits.
Meeting These Challenges
What can women do to boost their retirement readiness? Consider these three tips.
- Set goals. Think about the kind of retirement you want, and then estimate how much that lifestyle is likely to cost, considering that you may live 20+ years into retirement.
- Start saving today. Contribute as much as you can to your employer-sponsored retirement plan, especially if you can benefit from a company match. If you plan on taking extended time off from work for whatever reason, make sure to keep saving.
- Pay yourself first. Helping loved ones financially may be important to you, but it can make for a smaller nest egg. Just as we're told when flying to put our oxygen masks on first before helping others, don't let others sidetrack you from saving for your own future.
Regardless of your gender or age, having a sound plan for retirement can motivate you to reach your goals. To learn how you can make the most of your retirement savings, speak with your local Regional Office representative.
2 Gender and Marital Status Comparisons Among Workers, EBRI 2017 Retirement Confidence Survey, Fact Sheet #5.
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