Submitted by: Autumn Nessler, Principal, An Intentional Life, LLC

Why focus on “women only” in my coaching practice? One of several reasons for doing that is “because a woman’s retirement is very, very different than a man’s.” True, or just an illusion on my part?

In conducting extensive research and consulting with retirement experts I learned that when it comes to retirement planning, women are impacted by circumstances and issues that men aren’t. Here are some of the things that I learned.

1). We have to work longer to fund our Retirement. Why so?

Research shows that women are entering the workforce later and/or taking time out to raise children or care for aging parents (average of 12 years total time out of the workforce). The results of doing so include; loss of income and lower contributions to employer-sponsored retirement plans and social security.

Disproportionately, women are seeking jobs, both full and part-time, that offer flexibility because of caregiving responsibilities. Many of these jobs do not offer a retirement savings plan.

Because we live longer (4-7 years longer) our costs for doing so, especially health care, are higher than a man’s. In addition, there is an 80-90% chance we will be solely responsible for our retirement finances due to divorce or widowhood.

For all of the aforementioned reasons, women are finding it necessary to spend more time in the workforce than their male counterparts in order to feel financially secure in their Retirement.

2).  We Have Less in Retirement Savings. Why so?

Firstly, we make 80% of what a man makes for the same job. Less income means fewer savings opportunities in Social Security and Employer-Sponsored Retirement Plans.

Secondly, men most frequently cite saving for retirement as their greatest financial priority. For women, the top financial priority is “just getting by — covering basic living expenses.” We are also predisposed to take care of other’s needs rather than saving for our own retirement.

Finally, if we are saving for Retirement, the National Institute on Retirement Security suggests we may be more risk-averse than men. This means we tend to be less likely than men to invest in riskier investment opportunities that can provide a higher return.

Taking into consideration all of the above, including being risk-averse in our investments means less in our own retirement fund.

3). We may find Finances intimidating. Why so?

Today, in most households, financial responsibilities are divided up.

We are letting our spouses take the lead in long-term financial planning because we lack confidence in that area. We oversee the family budget/household maintenance.

This perceived gap in financial literacy leads us to a variety of not-so-great decisions. Here are just a few… We don’t take full advantage of our employer-sponsored retirement plans. We underestimate our financial needs for Retirement. We under-invest in stocks and tax-favored assets, leading to disappointing long-term returns. Finally, we don’t seek on-going opportunities to build our financial literacy.

Women and Retirement. Unique challenges, needs, planning requirements (both financial and non-financial) and more importantly, wonderful opportunities!

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