4 things that may threaten a women's retirement security
At a time when women are experiencing a social and an economic upswing, they still have a steeper uphill challenge for a secure retirement than men do. Here’s why:
Women are likely to live longer than men by roughly 5 years and that can be a threat to women’s retirement security.1 How? While technically they could enjoy retirement longer, they are also more likely to outlive their retirement savings as well. Throw in the cost of additional years of healthcare and now you’re looking at greater need to save more.
The gap in economic equality is narrowing thanks to women gaining work in higher-paying fields as well as holding high-ranking positions. Still, there is a significant disparity in wealth. The wealth gap looks at your total balance of assets minus debts, so it gives a much more accurate picture of how one is doing financially than measuring wages.
Lack of Investing Confidence
Women are taking control of their financial lives like never before, but when it comes to investing, their confidence decreases drastically.2 Despite consistently earning higher returns, they tend to be more risk-averse, sacrificing growth opportunities for safety. Saving is an important step in retirement planning, but it’s also important to take opportunities to build wealth.
Likely to Work Less
Taking on the responsibilities as caregiver can lead to gaps in active employment for women. Nearly four-in-ten mothers said that at some point in their work life they had taken a significant amount of time off (39%) or reduced their work hours (42%) to care for a child or other family member. Roughly a quarter (27%) said they had quit work altogether to take care of these familial responsibilities.3 Ultimately, this leads to fewer years worked and a smaller contribution amount toward their retirement, resulting in lower lifetime savings.
The good news is that you can overcome these challenges by saving smarter and developing a sound plan. Facing the numbers and knowing the facts can very well be the motivation you need to take control of your financial future. To learn more about how to make the most of your retirement savings, be sure to speak with your financial advisor.
1. “Winning Over Women In Financial Services” – Kantar Research report, 2018
2. Study conducted by Age Wave Research Group. March 2018 - https://agewave.com/what-we-do/landmark-research-and-consulting/research-studies/women-and-financial-wellness/
3. Pew Research Center Survey of U.S. Adults, March 2019 - https://www.pewresearch.org/fact-tank/2019/03/22/gender-pay-gap-facts/