Retirement planning is important for everyone. It’s also different for everyone.
No two people are completely alike. Everyone has their own financial needs and priorities for their life after leaving the workforce. That makes retirement planning a very unique process.
At the same time, there are certain considerations in retirement planning that tend to apply to specific groups of people. These aren’t absolutes — everyone is different — but they’re worth thinking about and taking into account.
Generally speaking, women and men have many things in common in terms of retirement planning. The ultimate goal of building a secure financial future is the same. The benefits of working with a fiduciary advisor apply to both men and women.
However, women and men also have some key differences that come into play in retirement planning. Many of these differences stem from the longer average life expectancy of women compared to men. Conversations about women and retirement planning must address those differences to paint a more complete and relevant picture of retirement.
Let’s take a closer look at important factors for women in their lives beyond the workforce. Whether you’re a single woman starting retirement planning or have a spouse, this information can help you make a more informed decision about your future.
Priorities for Women Planning for Retirement
Overall, women have longer average lifespans than men. That’s especially important to take into account as you start to plan and save for retirement.
The Centers for Disease Control and Prevention (CDC) report a major gap in life expectancy by gender. As of 2021, US women had an average life expectancy of 79.1 years. That’s a significant difference from men in the US, who had an average life expectancy of 73.2 years in 2022.
The average difference between men and women is nearly six years. That’s time that comes after exiting the workforce. At this point, women retirees count on their investments, Social Security, and other forms of non-work income for financial support.
On a very basic level, that means women need more money to support themselves after retirement as compared to men. Living longer on average requires a longer-term plan to build sustainable retirement savings. Your financial advisor should take that into account when suggesting potential investments and strategies.
Additionally, longer life expectancy can lead to certain costs, such as long-term care. It also leads to changes to certain retirement benefits, like Social Security benefits. Let’s take a closer look at both.
Long-Term Care and Assisted Living
Retirement planning for single women, widows, and women with healthy spouses needs to take potential long-term care into account from a life expectancy perspective.
As people age, the potential need for assisted living, in-home care, and similar types of support increases. Women live nearly six years longer than men on average. That difference unfortunately puts more of a financial burden on women for long-term care.
A secure retirement for women includes strategies for addressing the potentially high costs of long-term care. Those may include savings, investments, long-term care insurance, and other resources. It’s possible to address this increased cost, but only with a thoughtful and regularly adjusted retirement plan.
Social Security Benefits
Social Security income often isn’t enough to support a stable retirement by itself. However, many individuals and couples count on this guaranteed income to supplement their budget, helping to maintain their lifestyles.
Deciding when to start receiving benefits is important. Cost-of-living adjustments will change the value of each payment over time. That’s also important to consider in long-term budgeting.
However, married women, widows, and even divorcees have to think about another variable when it comes to Social Security benefits. Once a spouse passes away, one of a qualified retired couple’s two benefits payments will also end. This can happen to both men and women, but may be more common for women due to their longer average life expectancy.
However, you could choose to start receiving your spouse’s payments, replacing your own. The Social Security Administration (SSA) provides death benefits and options to surviving spouses and, in certain circumstances, divorced spouses.
That includes the option to receive part or all of your deceased spouse’s Social Security benefits. Social Security is based on an individual’s monthly earnings and time in the workforce.
Did your spouse earn more and spend more time in the workforce than you did? Taking this survivor’s benefit may be a good financial decision. It can lead to a higher payout than would be possible through your own benefits.
However, age, past income, and many other factors come into play with this decision. Working with a knowledgeable retirement planner can help you make the best decision based on your individual circumstances.
More Retirement Planning Tips for Women
Age and longer life expectancy influence many important retirement planning decisions for women. However, there are other retirement considerations that don’t center on that difference, including:
Impact of Childcare and Elder Care
Women often take the lead in caring for their newborn children. They also frequently help care for elderly family members. In both situations, that can mean working less or temporarily leaving the workforce entirely.
Time spent away from work can mean less retirement savings and reduced contributions to retirement accounts. In these cases, it’s especially important to make sure your investments are managed properly.
Impact of a Spouse Managing Finances
We want to be clear that this point can apply to both men and women. It all depends on how spouses divide their shared responsibilities.
Did your spouse take the lead in managing your household finances, savings, and investments? It can feel especially difficult to take over this task following a divorce, or their passing.
Working with professional retirement planners, especially fiduciaries who are bound to act in their clients’ best interests, can help. They can share their knowledge and experience to help you navigate the many financial needs of retirement.
Planning for a More Secure Retirement as a Woman
Retirement planning is complex. Professional retirement planners can provide support throughout the process, guiding you toward more financially stable ground.
Our founder, Jordan Dechtman, started Dechtman Wealth Management following his father’s passing. He saw the struggles his mother faced in managing their family finances, and realized his passion was to help others build a more stable financial future.
Important Disclosure Information
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Dechtman Wealth Management, LLC [“DWM”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from DWM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. DWM is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the DWM’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.dechtmanwealth.com.
Please Note: DWM does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to DWM’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
Please Remember: If you are a DWM client, please contact DWM, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently.
Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.
"*" indicates required fields