Combating Retirement Challenges for Women

By Katie Pfeifer

Days spent traveling, time to enjoy our favorite hobbies, or just living a peaceful life – these are just some of the things many of us think of when we dream about retirement. But for half of the population, those dreams may be a bit further out of reach. Women’s earnings and economic contributions to their families are of growing importance, however there are still several more challenges women face in meeting their financial retirement needs as compared to their male counterparts – but why?

LIFE EXPECTANCY

As we learned over the years, women tend to have longer life expectancies than men. In fact, the average life expectancy for an American woman is around 81 years old, compared to about 76 years old for men. But why is this fact important when it comes to finances? Living longer simply means more expenses. For those 5 extra years, women are exposed to financial risks such as inflation, outliving assets, or unexpected health costs.

PAY GAP DURING WORKING YEARS

According to the Pew Research Center, in 2018, women earned 85% of what men earned in an analysis of median hourly earnings for both full – and part-time American workers. This estimated that a female would need to work 39 extra days to earn what a man did in 2018. Calculate that over a 35-year career and you’re looking at nearly 4 additional years women would need to work to earn the same as men! Add this to the trend that women are taking over the traditional “breadwinner” role for their families. This means that not only are those women making less than men, but their salaries are having to stretch further to provide for their families.

CAREGIVING

A recent report from the Government Accountability Office (GAO) found that family caregivers are often placed in circumstances that endanger their financial future and retirement plans. This report also found these caregiving responsibilities were more commonly placed on females. Specifically, for working caregivers, caring for elderly parents, a spouse or a loved one more often than not impacted their jobs. Having to reduce work hours to care for their family members could lead to income volatility or interruptions to paying jobs.

TAKE ACTION

Without adequate planning, the risk of outliving your retirement funds could be a very real possibility. The good news is that having a plan in place is one of the easiest ways women can prepare for their nonworking years. 

1. GET INVOLVED EARLY

One of the most crucial components to planning for your financial future is to become more involved in the conversation, and to not be afraid to ask questions or speak up. Many women downplay their role in the financial arena but having a more hands-on approach can ensure that you are in the loop on your personal financial situation.

• SET GOALS

Ask yourself “how do I want to live in retirement?” Do you want to spend your days doing your favorite hobby, or do you want to volunteer at your local non-profit, or pick up a part-time job? Do you want to travel the world, or do you want to stay closer to home? Do you want to help your kids, or grandkids with their education expenses? Answering these and many other questions will help you have a better picture for what you need to prepare for.

• TALK WITH A PROFESSIONAL

It goes without saying that everyone’s financial situation is different. Getting the opinion of an unbiased fiduciary financial professional can unveil some key matters that pertain to your specific needs. They can help guide you to additional strategies, resources, and options that you may have not been aware of.