The fact is that women live longer than men. How can they avoid running out of money during retirement?
The volatility stemming from the pandemic and its repercussions have had many investors thinking about the safety and security of their nest eggs. For women, in particular — who are more likely to live longer and often have less money set aside for retirement than men — that financial hit often feels especially stressful.
The implication is that there are more retirement years to fund and additional healthcare costs to incur, impacting their finances in a way that urges us to beef up both our savings and emergency and retirement funds. As the average life expectancy for a woman is only increasing, they may easily need to save for a retirement that lasts more than 30 years. There’s always the conventional way: maxing out your 401(k) contributions (especially if your employer offers a match), opening a Roth IRA so you don’t have o pay those taxes on your investment gains in the future, etc. This is great advice, but with one caveat: Women should be saving differently than men due to the fact that we have longer to save for. As we’ll discuss in the next bit, women are more likely to take career breaks and even leave the workforce entirely or work part-time to take care of children or family members, causing them to miss out on peak earning years in their careers. This coupled with the fact of expecting a longer life expectancy urges women to:
- Hold out on collecting SS benefits til much 68 or 70 to increase benefits. Goes up by 8% each year you delay (include an example)
- Front-load retirement contributions in their early 20s and 20s- before you have children (peak earning years)
- Consider a Roth IRA, especially as a single-filer and/ or a digital investment portfolio like GWP
And finally, the bottom line is that for women who are still years away from retirement, do what you can to save for the future and work to ensure you have enough money to last through your lifetime. Save more. Invest to build wealth. Plan for long-term care solutions. Seek guidance from a professional who can help mitigate unprecedented factors that could impact your retirements. Planning ahead can help build a sufficient nest egg, which is critical in your retirement planning so you can meet your future needs with confidence.
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