The Elusive Goal of Retirement for Working Women

Almost all individuals of working age dream of retiring in comfort, it’s important to note that, for women, the odds are not stacked in their favor. Regardless of what type of occupation they have chosen or what list of business ideas for women they have gone through, the truth is that there are many difficult decisions and complicated choices that lead to women’s ability to save adequately for a worry-free retirement in the golden years.  Understanding and accepting this is the first step for women who are interested in planning wisely and investing in a post-retirement financial future.

Why are the factors that make retirement security a difficult goal for women?

Age and life expectancy

There are many reasons why retirement security is an elusive goal for many women. First of all, there are issues of age and life expectancy. Women live longer than men, and their health care costs are typically higher. The life expectancy of men is 74.8 years, while women can expect to live almost six years longer than their male counterparts, making the costs across their lifetimes greater. Even though women live longer, women have a tendency to retire at the same time as their partners. Since women also tend to marry older men, women are entering retirement two to three years younger than their spouses.

Another aspect of life expectancy and age is that men work almost 40 years of their lifespan, while women spend approximately 27 years in the workforce, exiting and entering the workforce to raise families, care for sick children, or monitor aging parents. Between the ages of 75 and 84, only one-third of women are married with a spouse present, and with women age 85 and older, only 13 percent are married with a spouse present. Partially because of this, women represent almost 70 percent of people in nursing homes. With the death of a spouse, women often experience a significant drop in income from her spouse’s retirement, pension, and Social Security, and these data do not even take into account issues related to divorce and how it impacts long-term financial planning.

Lack of retirement planning

Women tend to save less for retirement than men do. The Willis Towers Watson survey indicated that although both men and women acknowledge the importance of saving for retirement, women do not place as high a priority on setting the money aside or contributing to a retirement account. Women prioritize “meeting daily living costs” and “paying off debt” higher than putting money into retirement. While there are many reasons why, some may include disconcerting facts about women’s earnings, work status, marital status, retirement income, and life expectancy. Two-thirds of working women, for example, earn less than $30,000 a year. Half of all women work in low-paying jobs are in industries that do not provide retirement plans for 401(k)s. Women are more likely than men to work part-time jobs, employment that is associated with lower wages, fewer opportunities for advancement and promotion, and a lower likelihood of pensions or retirement planning.

What can women do to move toward retirement security?

Unfortunately, it is not as easy to buy retirement security as it is to purchase real Instagram followers. In order to become retirement savvy, women must look critically and carefully at the three sources of retirement income and do so as early as possible in their working years. These three sources include Social Security, retirement accounts, and personal savings.

  • Social Security.  Social Security replaces only 40 percent of an average worker’s wages, and by itself, is not enough to sustain a lifestyle. With no other sources of income such as pensions or savings, many retired women live on the brink of poverty.

  • Private pensions and retirement savings plans.  401(k) or 403(b) plans are an integral part of a well-designed retirement income prospectus.  Less than half of working women, however, have access to a private pension or retirement plan at their jobs, or they may leave places of employment before becoming fully vested in a company pension benefit. Women who are not offered plans through their employers should consider opening an individual retirement account (IRA).

  • Individual savings. It is critical that women save on their own and save more than men in preparation for retirement. They not only live longer, but also are more likely to have higher expenses for health care, long-term care, and prescriptions drugs. Look carefully at how much you should save during your working years.

As long as women earn less, live longer, experience more interruptions from paid work, and work in the types of jobs that do not include benefits, retirement security for millions of women retirees will remain elusive.

Do you have advice for women planning for retirement? Feel free to share here.

Author Bio : 

Darshan Shah is a young entrepreneur, digital marketer and blogger. He’s founder of TheWebReach.com and providing Digital Marketing services like SEO, Guest Blogging and many more. He loves to help people to grow their business worldwide through his digital marketing knowledge.  He’s enthusiastic about creating blogs and writes creative content for the readers.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.