Charting a course to a secure retirement

DATE | 08/06/18
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When it comes to saving for retirement, women are still facing more obstacles to financial security than men.

In fact, women are 80% more likely than men to be impoverished at age 65 and older (National Institute on Retirement Security). And they seem to be aware of this—just 10% of women feel very confident in their ability to retire (Transamerica Center for Retirement Studies).

This is often because women have to navigate unique barriers in order to secure their retirement. While the following factors put many women at a financial disadvantage when it’s time to retire, there are steps they can take to help minimize or eliminate them.

And what better way to learn than from your colleagues in education. Peggy Weber, Janice Delo, and Pat Howell all share their own experiences and knowledge gained to help break down some of these barriers and inspire you be the captain of your own financial journey.

Lower lifetime earnings

Women’s lifetime earnings are often lower than men’s. When you factor in the income disparity women still face (women earned 81.8% of the median weekly earnings of men in 2017, according to the Bureau of Labor Statistics) and the higher likelihood that women will take time away from the workforce to raise kids or care for aging parents, women are more likely to have lower earnings overall.

These added responsibilities often have a negative impact on their finances in several ways. Women who are caregivers are more likely to arrive late or leave early from work, cut back to part-time hours, decline promotions, or leave the labor force all together. This translates into less in Social Security payments, pension benefits, and retirement savings (whether employee or employer contributed).

It’s also common for women to delay saving for retirement to pay for college or to help out other family members. And those who don’t start saving for retirement early miss out on the benefits of compound interest, which is more difficult and costly to make up for later on.

“Start saving early, even if it’s just $10 a month. It adds up, and you’ll never regret it.” – Janice

Less tolerance for risk

Women tend to take fewer risks with their financial investments than men do. Unfortunately, low-risk investments usually earn relatively low returns ( By investing too conservatively, women run the risk that the rate of inflation will outpace the rate of return on their investments. This may increase their likelihood of facing financial uncertainty in retirement.

“I’m conservative with money day-to-day, but I’m moderately aggressive as an investor. It’s worked well for me. I just set it, forget it, and let it grow.” – Peggy

Chronic illness

Because women live longer, they are at greater risk for having a chronic illness. Women are also less likely to have a partner at home to care for them if they suffer from chronic illness, which means they must shoulder additional costs related to hospital stays or long-term care services

More than 70% of nursing home residents are women, and among people age 75 or older, women are 60% more likely than men to need help with one or more activities of daily living, such as eating, bathing, dressing, or getting around inside the home (AARP)

“I regret not understanding the value of the long-term care insurance plan we had at the district. When it was being eliminated, we had the chance to pay it up and I didn’t. That was a mistake.” – Peggy

Being on their own

Women are more likely to be on their own later in life because:

  • Women live an average of five full years longer than men (National Center for Health Statistics).
  • On average, women become widowed at age 59 (Journal of Financial Service Professionals).
  • Divorce is also very common—about 40% to 50% of married couples divorce in the United States. Further, the rate of “gray divorce” for those age 50 and over has roughly doubled since the 1990s (Pew Research Center).

Also according to Pew Research, 90% of women will be the sole financial decision makers for their households at some point in their lives. The loss of a spouse—whether by death or divorce—typically results in a lower standard of living and less financial security. And, because women with partners are quite often not involved in their household finances, they may struggle and feel ill-prepared to make financial decisions once they’re on their own.

“I got help after my husband died. It helped me to set goals and put together a plan to achieve them.” – Pat

Adjusting your sail

By taking the time now to plan for your financial future, you may gain peace of mind knowing that you’re doing all you can to provide for yourself and your family. And in our busy lives, we could all use a bit more peace of mind. In the end, it’s all about you, your goals, dreams, and financial success.