Women will face different challenges when planning for retirement than men. Not only do women have a longer life expectancy, they also have higher healthcare costs in retirement. Then we also need to consider that for women, career gaps are more common to raise children or be caretakers, and unfortunately, lower lifetime earnings are also common due to the pay gap. All of these factors will impact retirement planning for women.
As a woman-owned financial planning firm that specifically serves breadwinner women – we must acknowledge the barriers and difficulties women will face as we discuss how to plan for a secure financial future in retirement. Because we definitely know you deserve to have a retirement plan you’re excited about.
Retirement Planning for Women: Earning
One of the biggest factors impacting women’s retirement planning is their income during their working years. Career planning and income growth are crucial elements that can make or break your retirement savings. While healthcare costs in retirement are significant, they are not the primary threat to your financial security (which is why those are covered just below). The real challenge lies in not earning enough during your career to save adequately for the long life you’re likely to have.
To overcome this, it’s essential to focus on career advancement and salary growth. Regularly negotiating for raises and promotions can significantly increase your income over time, allowing you to save more for retirement. This requires a proactive approach, including setting career goals, seeking opportunities for advancement, and continually building your skills to stay competitive in the job market.
Retirement Planning for Women: Longevity and Healthcare Costs
I touched on this just above, but the reason for building a career plan is to support your longevity. On average, women live longer than men, and most wind up single, which means their retirement savings need to last longer. This extended lifespan also brings higher healthcare costs, which can be a substantial burden in later years. Women must account for these additional expenses when planning their retirement. By prioritizing your earning potential, you can ensure that you’re not only able to cover healthcare costs in retirement but also enjoy a comfortable and financially secure future. Still, ensuring that your retirement plan includes a comprehensive healthcare strategy, including long-term care insurance and Medicare planning, is essential to safeguard your financial security as you age.
Retirement Planning for Women: Savings and Investment Strategies
March 2020 was a pretty remarkable time in the market. With the fears of COVID paralyzing the world and global economy, the stock market took a dive. But this was temporary, and the market soon recovered. We made sure to stick with our investment strategy and keep emotions at bay.
And this is the strategy we execute when retirement planning for women. We invest for the long term in a diversified portfolio of investments. We are not looking to pick individual stocks that we ‘hope’ will outperform a diversified portfolio.
We know to expect market volatility. If you’ve ever looked at a chart of the S&P 500 you’ll see the dips that have happened over time. For our clients who are primarily women planning their retirement, we build an investment strategy aligned with their goals and tolerance for risk – making sure that it is diversified. This, combined with the entire financial plan that considers their needs and short-term savings goals, can help our clients navigate uncertain times in the market and even their own life without so much stress.
Don’t Forget Financial Literacy is a Part of Your Retirement Plan
Financial literacy is a crucial component of a successful retirement plan. Understanding the basics of budgeting, saving, investing, and navigating Social Security benefits empowers women to make informed decisions about their financial future.
At WealthChoice, we prioritize educating our clients, ensuring they have the knowledge and tools necessary to achieve a secure and fulfilling retirement. No questions are off limits here, and you’re working with a women-led team who are never going to make you feel uninformed.
Whether you’re just beginning to plan for retirement or revisiting your strategy, brushing up on the basics of your financial literacy can provide the confidence needed to make the most of your retirement.
To recap, when retirement planning for women, we prioritize:
- A career plan that considers longevity and your income plan to cover costs in retirement, including increased healthcare costs.
- An investment strategy that is diversified for your long-term retirement goals, not built on trying to snag ‘quick’ wins.
- Financial education – from basic budgeting and saving to understanding various forms of investing. Our clients are informed and have peace of mind about their financial plans because of this.
Remember, you deserve a retirement that reflects the life you’ve worked so hard to build. Let’s make sure you get there.
