Retirement Challenges Women Face

Women face unique retirement challenges that men don’t.  That just sounds WRONG, doesn’t it?  But don’t fear – women CAN have a comfortable retirement.  However, there are some significant things we need to consider during our working years to make sure that happens.  Ready for this journey?  Read on.

Retirement Challenges Women Face

The Gender Gap is still alive and well

It is true that the gender gap is still a “thing”.  If you’re a man reading this, I can see your eyes rolling, so stop it right now.  Women earn less during their working years than their male counterparts.  As a matter of fact, women earn 80% of what men make.  This means that on average women make 80 cents for every dollar paid to men.  According to the National Partnership for Women and Families  “the median annual pay for a woman who holds a full-time, year-round job is $40,742 while the median annual pay for a man who holds a full-time, year-round job is $51,212.”  For some ethnicities and in some states, the amounts are even lower for women.

Because of this wage gap, women:

• have less money for necessities for themselves and their familes, so savings take a back burner
• generally save significantly less for retirement than our male counterparts
• will likely receive less in government benefits like Social Security, which is based on income earned during our working years.

Women Work Fewer Years than Men

It’s true for many, if not most women, that we work fewer years than men.  There are several things that contribute to this:

• child bearing and rearing
• taking on much of the responsibility when children are ill.  (To be fair, many spouses are sharing this responsibility now, but for a single mother, there aren’t many other choices)
• making sure the needs of elderly parents are met

Women Are Living Longer

Although women generally live longer than men, today both men and women are living longer than their parents and grandparents ever did.  Medical advances and choices to be healthier in our second phase of life are contributing to this phenomenon.

But before you celebrate too much, please realize that healthcare costs will be higher (more years to pay) and retirement funds will need to last longer.

Women Face Unique Retirement Challenges

Because of the wage gap, working fewer years than men, and living longer, women face unique challenges when planning for the future.  Often, working women – busy balancing family and career – tend to put retirement planning on the back burner.  They take a more passive approach to establishing realistic goals and working toward them.

As women, we need to ensure that we are making good financial decisions.  We must not base our retirement plans on what we’ve seen or heard others do.  Many women are guessing at when they can retire, how much money they will need and how long their retirement funds might last.  As women, we need a solid plan, not guesswork.  When we take the time to get the numbers right and really understand what we need, we make the best decisions.  And that . . . is the hardest part – taking the time needed to put together this comprehensive plan and putting our needs first for a change.

Women may need to set aside as much as 20% more money than originally thought to make sure they can retire comfortably.  And at the end of the day, isn’t that what we all hope for?  A comfortable retirement?

So, What’s A Woman To Do?

Retirement doesn’t have to be an end-of-life choice.  As baby-boomers retire, we are looking at retirement life as a new beginning, not “the end”.  Your retirement years can certainly include recreation and relaxation, but they can also be a wonderful time for reinvention! You may be able to retire from one career and begin a new career path altogether.

Some women are going back to school to earn a new or advanced degree in a different field or industry.  Some are able to leverage their knowledge and years of experience to establish consulting practices after retirement . . . and set their own hours and financial goals.

There are many opportunities to reinvent yourself based on your knowledge, skills, experience and interests. Ask yourself, “What have I always wanted to do?

Mini-Retirement

If you’ve have a demanding career and are feeling burned out, perhaps you just need a break.  Many companies will allow you to take a sabbatical for a period of time while you think about what you want to do with the rest of your life.

If you’re not planning to continue with your current company and can afford it, a mini-retirement may be just what you need.  Take the time necessary to explore your passions, interests and future work opportunities.  Then make them happen!

Part-Time Employment

No matter how much you save, you may find you just can’t afford the retirement you want.  In that case you could discuss working part-time with your current employer.  If that is an option and you’ve reached your full retirement age, you can file for Social Security (if you need the additional income to make it with your part-time salary).  You will have more freedom, perhaps a couple extra days off each week, depending how the part-time is structured.  In any case, you will have more time for yourself, your family and perhaps to start hobbies you’ve often dreamed of pursuing.

Delay Retirement

I hate to state the obvious here, but you may not be able to retire at the age of 55 or even 65.  You may even have to wait until you’re 70, but that isn’t the end of the world, either.  If you’re in good health and can work that long, continue to work.  Put money back for retirement and when that day comes, you should still have 15 to 20 good years to cross off items on your bucket list.  Another good side of this is your Social Security continues to grow until you reach the age of 70 – so that’s a win.

Retirement Reinvention

Regardless of how you decide to live out your years in the retirement life phase, you must be intentional about planning and creating your retirement vision.  Do NOT leave this to chance.

Figure out what you want to be when you grow up and start your “new beginning”. Practice your networking skills now.  Meet other women who have done what you are planning to do and ask their advice.

The earlier in your career you start to plan and save, the better your chances that you can make up for “gender gap” and its associated fallout.  Commit to doing what it takes to make your dreams happen.  Your future depends on it.

Where are you in the planning phase of your retirement?  Are there other steps you have taken that I’ve not covered?  Please leave me comments below and let me know.