There are unique financial planning considerations for women that translate into a need to save more money.
Retirement savings are supposed to last through your lifetime. That’s the plan, of course. But with the average life expectancy of women roughly five more years than it is for men — 81.1 years vs. 76.1 years1 — the savings need are therefore greater.
Of course, five years seem to pass quickly as one ages, but bills continue to trickle in. And for people in their 70s and 80s, that means healthcare expenses are (more) likely to increase, placing a financial strain on one who depends on Social Security and personal assets for income.
And those stats are just averages. There are those who live well into their 80s and even 90s today, extending retirement to 20 or even 30 years.
The savings burden on women increases further when one considers that many take time off to raise children, pausing the time when a job income would otherwise contribute to their retirement savings.
That time away from work also impacts Social Security benefits, another drain on retirement savings.
Estimating Your Savings Need
While everyone’s need are unique, participating in an individual retirement account, whether employer-sponsored or otherwise, is an important way to build your savings. Err on the side of overestimating your needs when you assess your contributions to retirement accounts. The longer your savings can compound interest, and investments have to earn returns, the more you stand to accumulate.
For insight into your estimated retirement benefit, visit www.ssa.gov and its benefits calculator. Depending on your needs and expected assets, you may need to delay retirement or contribute more to your savings account.
Finally, don’t feel that you need to make these analyses alone. Your financial professional can help you calculate your savings needs while developing a saving strategy.