The Retirement Saving Crisis: What Women Need to Know

By Sarah Carlson, CFP®, CLU®, ChFC®

When it comes to retirement planning, women have a lot to think about. They not only have to worry about saving enough for retirement, but also about the possibility of outliving their retirement savings.

This can be a daunting task, especially since women are statistically more likely to live longer than men. But don't worry, you're not alone. 

Many women are in the same boat when it comes to retirement planning. In Facing Financial Fears, you'll learn how to chart the course for your personal journey, especially for retirement. 

In this blog post, I'll provide some tips on how to get your retirement savings on track. So let's dive in!

Why Retirement Planning is More Complex for Women

Retirement planning can be more complex for women since they have a higher life expectancy. This means that they need to plan for the possibility of outliving their retirement savings.

One way to do this is to make sure that you have enough saved so that you can cover your basic living expenses for at least 20 years. This will help ensure that you don't run out of money during retirement.

Another consideration is how you will generate income in retirement. Women who are retired or close to retirement age are less likely to have a traditional pension than men. This means that they need to think about other sources of income, such as Social Security or part-time work.

Lastly, it's important to consider how you will healthcare costs in retirement. Women tend to have higher healthcare costs than men, so this is an important factor to take into account when planning for retirement.

The Retirement Savings Average: How Much Women Should Aim to Save

The retirement savings average is slowly increasing, but many women still don't have enough saved to comfortably cover their golden years. The amount of money you will need to save for retirement depends on a few key factors, including when you plan to retire and how much you expect to spend each year. 

Generally, you will need around 80% of your pre-retirement income to live comfortably in retirement. This means that if you earn $50,000 per year, you will need around $35,000-$40,000 saved up to live comfortably once you retire.

There are a number of ways to save for retirement, so it is important to start as early as possible. One popular option is to contribute to a 401(k) or other employer-sponsored plan. 

You can also open an individual retirement account (IRA) or invest in other vehicles such as stocks or bonds. The most important thing is to start saving sooner rather than later, so you can take advantage of the power of compound interest.

Tips for Female Breadwinners

Here are some tips for female breadwinners who want to get their retirement savings on track:

• Start saving early: The sooner you start saving for retirement, the better. If you can, start saving in your 20s so that you have a longer time horizon to grow your savings.
• Invest wisely: In addition to saving regularly, it's also important to invest your money wisely. Consider investing in a mix of stocks and bonds so that you can grow your retirement nest egg while minimizing risk.
• Make catch-up contributions: If you're behind on retirement savings, don't despair. You can make catch-up contributions to retirement accounts such as a 401(k). For 2022, the limit for 401(k)s is $20,500. For people 50 and older it's $27,000. For IRA contributions, it's $6,000 if you're younger than age 50, and $7,000 if you're older than age 50.
• Consider working part-time in retirement: If you're worried about running out of money in retirement, working part-time can be a good option. Not only will it give you extra income, but it can also help keep you mentally and physically active.
• Stay healthy: One of the best ways to reduce retirement costs is to stay healthy. This means eating right, exercising regularly, and getting regular checkups. By taking care of your health, you can help keep your healthcare costs down in retirement.

Conclusion

By following these tips, you can get your retirement savings on track and enjoy a comfortable retirement. If you need help from our team of Spokane Financial Advisors, we're here to help. Start planning today!

 

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.