Retirement planning is essential. However, the one retirement plan fits all formula is a myth. Every person has different plans for their golden years. Hence, situations like married couples that share the same retirement plan might not have a lucrative outcome.
A retirement plan must reflect the financial needs and long-term goals of an individual. Hence, retirement planning is different for women than for men. Unfortunately, even in the present, wherein women are becoming working professionals, their retirement plan takes a back seat.
Even though studies indicate women tend to live longer than males, indicating their longevity entails finances, only a few women plan their retirement and financial stability for post-retirement years.
This blog is an amalgamation of five reasons why retirement planning differs for women from men and provides insight on how to save money for the future. And why women must actively participate in securing their finances.
Five reasons why Retirement Planning is different for Women than Men
- Women are the family's primary caregivers
As more women join the workforce, the concept of stay-at-home dads is becoming common. However, most women still choose to stay at home and raise children. The traditional dynamic of women being the primary caregivers still exists. From children to aging parents, women handle work and house responsibilities together.
Putting their home first, women tend to take convenient jobs that do not pay as much. Hence, this work dynamic puts stress on their retirement savings and earnings. Additionally, missing out on work in your former years equals missing out on major financial contributions toward your retirement. Not prioritizing their finances can affect their pension and social security benefits.
Women also tend to retire early to care for their families or aging parents. Events like pregnancy and post-childbirth responsibilities also form reasons behind women taking a break from work when their earning potential is high.
- Women pay more in healthcare than in retirement.
In addition to existing finances, women must consider healthcare-related finances when planning their retirement. This situation arises from the probability of their longer life expectancy rate, which indicates they might be at a higher risk of health problems in their old age.
In events wherein the female outlives her spouse, her investment in a proper retirement plan will aid her financial expenses. Long-term medical expenses are to be considered for females; as a result, there are differently curated life insurance plans for men and women.
- The existence of a wage gap
Be it the small-scale business sector or high-end workforce, a wage gap exists between both sexes. Even though countries like the United States have declared pay discrimination illegal since half a century ago, women are paid less than their male counterparts.
The wage gap disparity is even more toward minority women. This wage gap affects women in acquiring sufficient funds for their retirement. Women receive less in pension and overall retirement income due to lesser earnings throughout their lifetime. The wage gap contributes to why retirement plans for women differ from men.
- Women are conservative investors.
Certain studies indicate that women tend to be less invested when curating an investment portfolio. They are less hands-on with investing compared to men. Putting up some funds in a womens savings account is considered as the only investment for some.
Playing safe is not necessarily negative. But not investing or saving for retirement throughout your earnings will cost you later. Such events state less financial growth for women in their finance-acquiring years. The situation is more concerning for single and separated women as they have to rely on sources like alimony. Such events are taken into consideration. Plus, the inactive participation of women as investors make retirement planning different for both genders.
- Women avoid seeking professional help with finances
Women classify finances as a very discreet topic. Hence, they avoid discussing the same with professionals or their colleagues. Additionally, women need to be made aware of financial jargon. This keeps them from speaking on matters of finances. They often keep themselves out of conversations pertaining to finance and investment.
One of the reasons investment companies create separate retirement plans for men and women is that women need to take financial planners' help. Separate retirement plans make it easier for women to choose retirement policies. Especially ones that cater to their golden years' requirements. Irrespective of if they need to be made aware of financial jargon. A lack of financial knowledge can also get women trapped in debt. A debt trap can delay long-term investments and put women at a financial disadvantage.
However, it is optional to be fluent and well-versed in financial terms to create a retirement plan. So, if you need to pay more attention to your retirement plans, now is the time to get involved.
In conclusion, womanhood is about overcoming obstacles with resilience, despite the financial hurdles. There are a lot of challenges that need addressing when creating a retirement plan for women. Understanding finances is also important to regulate and navigate hurdles better.
Women should have different retirement investment plans than their spouses. Neither should they be dependent on the retirement savings of their partner. Life insurance plans cater to long-term financial needs and funds for emergencies. Hence, investing in a life insurance plan is ideal for retirement planning.
If you are yet to start creating a retirement plan for yourself, there is always time. Take into consideration your long-term and short-term financial goals, your savings, and your estimated requirements. You can create a personalized retirement strategy. A strategy that will give you independence and financial security in later years.
Investing in life insurance early on brings great returns. It ensures finances are taken care of during emergencies and that the family is financially secure in the event of death.
It might seem overwhelming in the beginning. But retirement planning is the ideal way to tackle expected and unforeseen expenses in the future.