The Gender Gap and Retirement – Part 3
On average, women live 5 years longer than men, and 81% of people 85+ are women.3 This ultimately means that women are more likely to be alone in retirement, caring for themselves financially. Longevity can also impact the other aspects of retirement including higher health care costs, the need for a higher Social Security benefit, and how long your savings will need to stretch to cover living expenses.
What to consider:
Talk to a financial professional or use a tool like a retirement score calculator to help make sure your retirement plan factors in a longer retirement. This can help you understand if what you're currently saving is on track. Additionally, consider some extra ways to help protect yourself, such as long-term care insurance or guaranteed income.
Many people don't account for the cost of health care in their retirement savings, nor do they realize that women are likely to need more. Women are also more likely to need full-time care (like a nursing home or assisted living), which can be in the 6 figures yearly. Additionally, many couples spend more money on the first spouse who needs it—statistically men. That often leaves women with less than they need.
What to consider: Plan to save additionally—and separately—for health care costs in retirement. She Retires and/or any of PenTrust’s Personal Pension plans are great fits in this regard!
Women are often expected to put family and other loved ones' needs first, even when it comes to money. This can include saving for a child's college ahead of retirement, caregiving, or letting a partner make the majority of investment decisions—more than 1 in 5 women say they have little or no involvement in decisions about retirement and other long-term financial planning.6 Collectively, this can leave women with less in retirement and other assets, particularly over the course of many years.
What to consider:
Remember that you have a high likelihood of longevity and being on your own financially, so earmarking enough for yourself is critical. You can always take out loans for a child's school (among other things), but you can't take out loans for retirement.
Any one of these factors might feel incremental, but when combined together over decades, the financial impact can be very real.
SOURCE: FIDELITY VIEWPOINTS/PenTrust