Women and Retirement Planning

As surprising as it may sound, many women still do not think about their retirement. Some may assume they will work until they are physically no longer able and that social security will cover any expenses they need. Others might believe that their husbands’ pensions or savings is enough. But statistically, women tend to outlive men, which means even married women are going to need to be knowledgeable about and in control of their retirement. Clearly, there are still misconceptions about retirement, and these underscore the importance of retirement education for women.

A Shift in Attitude

According to a report by Transamerica Center for Retirement Studies, only 16% of U.S. women said they had well-developed retirement plans, and 15% said they had no retirement plan at all. Why?

Among other issues, there’s something deeper than finances beneath women neglecting their retirement: even in this age, many women put themselves second, third, fourth, etc. on the list of people to care for. Some women don’t put themselves on that list at all. But the fact is, planning for retirement is planning for self-care. It has to be a priority.

My advice to women is first, change how you view yourself. Assess your other roles as caregiver, spouse, mother, etc. and be sure you are addressing your own needs. Prioritize yourself. Make part of that priority getting up to speed on planning for your retirement goals.

Steps to Take

Once you decide you are important and deserve a solid financial future, you can get control of where you are headed. Here are some steps in the right direction.

  • Take charge of your retirement. Assess where you stand right now with your retirement plans and see if you’re on track to retire when you want to. If you are married, take your spouse’s retirement into consideration. Also check on your Social Security benefits. Knowing these things earlier can help you better prepare for the future.
  • Inventory your needs, wants and wishes. Retirement planning is not all about money; it includes how you may want to change your lifestyle, take on activities that you have always wanted to do when you had time and how you would like to continue to make your contribution to the world at large.
  • Find out how much you will need to retire comfortably on your timeline. Look at what your current retirement income and investments will pay you monthly, versus your anticipated expenses. Your house may be paid off by the time you retire, but you may have higher medical expenses. Also, don’t forget to account for inflation. If it appears you’re not on track to retire comfortably when you would like to retire, it’s time to examine options: time, earnings, spending, savings. A financial advisor can help you learn what options are available and help you assess your retirement needs.
  • Educate yourself about different types of retirement investments. Learn about ROTH and Traditional IRAs, long term care insurance, Social Security and all of your other options for retirement.
  • Many employers offer retirement benefits, such as regular and Roth 401(k)s, TSP, deferred compensation and restricted stock. Take advantage of any company matching contributions; this is an addition to your savings that only requires you to save for retirement. Use an advisor to help you sort through your benefits to optimize their impact on your plans.

Don’t let yourself get caught up in the erroneous idea that retirement is not important or assume someone else can care for you once you retire. And don’t believe that you are not important or worthy enough to plan for a happy future. We all deserve to retire comfortably. Investing in that belief can help get you there.

Wood Smith Advisors, a Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.

“Finance Made Simple” blog posts are intended for educational purposes and not for specific advice.  Each person’s situation is different.  Consult your financial advisor for advice relating to topics discussed.

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