3 Essential Considerations for Women Who Are Planning for Retirement

Retirement Planning is not the same for both women and men.  Women face unique hurdles and risks that do not affect their male counterparts.   These risks include outliving their money, earning less but having more financial obligation, and aversion to take risks with their money.

What You Need to Know

  • Longevity

On average, women live five years long than men do.  This can have a big impact on the amount of money women need to have saved for retirement.   Women also tend to underestimate how long they will live for.  Many women live into their 90’s, but only plan to live into their 70s. 

It is clear that longevity is one of, if not the, biggest risk women face when it comes to their finances.  Women, on average, retire with only two-thirds the money that men do. So not only are they living longer than men, they are trying to do so on less.

  • More Caregiving, Less Income

It is no secret that the burden on family rearing falls onto women.   Women are more likely than men to take time off to care for children or elderly family members, women are more likely than men to be single parents, women see wages drop after having a child (71 cents to the dollar for men), and women spend 50% more time than men caregiving.

What we can derive from this information is that women are expected to work less, work FOR less, and spend more on their families.   This dramatically effects a women’s ability to save.

  • Risk Aversion

Women tend to be more risk adverse than men.  This desire for security within their investments can hurt their returns and put them even further behind when it comes to meeting retirement goals.   The tendency for women to be more risk adverse makes sense.   They are earning less, so therefore saving less, and have more family responsibility then men.  Women may feel like they do not have the money to take risks and this needs to be accounted for when creating a retirement plan.

The Bottom Line

So, what can women do to boost their retirement savings?   They must save more aggressively than men, and earlier than men. This can be easier said then done.   Working with an advisor early can help women get ahead.  Setting up automatic monthly RRSP contributions, maxing out company pension plans, and having a plan in writing are all things women can do to accelerate their savings.  If you would like to have a personal consultation, please contact Winnie at winnie@leoganda.com for an appointment.

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This information is designed to educate and inform you of financial strategies and products currently available. As each individual’s circumstances differ, it is important to review the suitability of these concepts for your particular needs with a Qualified Financial Advisor.