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For Women Only

DID YOU KNOW?

Over 80% of women will one day be in charge of household income,
… and only 20% feel prepared 1

Women earn better returns than men, up to 1%,
… despite being more conservative when investing 2

Despite earning 20% less,
… women have higher savings rates and retirement plan participation than men2

Whether married or single, widowed or divorced, women want the security of knowing they’ll be financially prepared to support the long fulfilling retirements they’ve worked so hard to achieve. While women and men may have the same ultimate goal when planning for retirement, our styles and our needs can greatly differ. We think differently, we feel differently, and we prioritize differently.

Some people may think that these things don’t make a difference when planning for retirement, but they do! Sometimes, it’s almost like speaking a different language. My husband and I had completely different perspectives when it came to planning, even though we both had the same vision for our retirement. Honestly, I only really developed a better understanding of these differences after my husband died.

As a retirement planner, I want to help other women define and create their own plans. By speaking the same “language,” I’m able to understand some of the concerns that women sometimes can’t even put into words themselves. We all know that ”Men are from Mars and Women are from Venus,” so why do we plan for retirement the same way? Maybe we shouldn’t…

Six Critical Reasons Women Should Plan Differently for Retirement than Men:

Women typically have longer lifespans.

The average life expectancy for women is 5-7 years longer than their male counterparts.3 In addition, married women who outlive their spouses will experience about a 30% reduction in household income.4 Because women live longer, and possibly with less income, they will need their financial resources to last longer and be more reliable.

Women are usually the primary family caregivers.

Women are the family nurturers for the children, stay at home moms, and later in life, often become the designated caregivers for elderly parents. In these roles, they often make financial sacrifices, dipping into retirement savings, or we are forced to leave the workforce early to become full-time caregivers.

Women continue to fall prey to lower wages.

Although the wage gap is closing, women often make less than their male counterparts. In many cases, women tend to hold lower-paying jobs or positions. And in some instances, due to competing priorities, women may move up the corporate ladder at a slower pace. 2020 data shows female, full-time, year-round workers, made only 83 cents for every dollar earned by men, a 17% wage gap.5 These gaps will account for lower social security, pensions, and 401k contributions.

Women will pay more in healthcare costs in retirement.

Rising health care costs, long-term medical care, and expenses associated with aging are critical components of any solid retirement plan. Unfortunately, women often pay more for these types of expenses than men in retirement. According to Fidelity, women should expect to pay $147,000 in health care costs (not including a possible long-term care event).6 One major medical event or an extended long-term care situation could potentially wipe out an otherwise sound financial plan.

Women are typically more conservative investors.

Women tend to play it safe while in the “Red Zone,” which is within ten years of your target retirement date. But understanding the difference between investing and asset allocation during the accumulation phase of retirement versus the distribution phase can make a significant impact on their ability to sustain retirement income. The sequence of returns and income allocation are concepts women will need to master while navigating the retirement journey.

Women have been underserved in the financial services industry.

The Allianz Money, Women and Power Study reveals that despite their growing economic power and influence, women continue to be poorly served by the financial industry. Women are hungry for knowledge about retirement planning but want a different way of learning, with greater importance placed on interpersonal skills. They prefer a more social way of learning, within a non-intimidating environment. The industry has underserved women, and as a result, 62% of the women surveyed still don’t work with a financial professional and seek the internet as their primary resource.7

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  1. FMR LLC (2021). “Blazing Pathways to Women’s Financial Wellness”
  2. Backman, Maurie (2021). The Motley Fool. “A Summary of 20 Years of Research and Statistics on Women in Investing”
  3. Shmerling, Robert (2020). Harvard Health Blog. “Why Men Often Die Earlier than Women”
  4. Sevak, Weir, and Willis (2003/2004). Social Security Bulletin, Vol 65, No 3. “The Economic Consequences of a Husband’s Death”
  5. AAUW (2021). “The Simple Truth About the Gender Pay Gap – 2021 Update”
  6. Grant and Epperson (2018). CNBC. “Here’s How to Plan for Higher Health-Care Costs in Retirement”
  7. Allianz (2016). “The Allianz Women, Money, and Power Study: Empowered and Underserved”