Retirement Planning for Women

This message is especially for women. Retirement planning for women is no less important than for men.

As I researched various topics for this website, I learned that women, more often than men, end up living in poverty after retirement due to lack of planning, late life divorce, and due to their lower lifetime earnings compared to men.

It is disappointing that we still need to address issues that are specific to women.

Women who take time out of work to raise a family are particularly at risk.

If this is your situation, and you are not yet at retirement age, it is crucial that you make provisions for your future as soon as possible.

This chart shows poverty rates for women (white bars) versus men (gray bars) in various circumstances, married, widowed, never married, and divorced.

Poverty Rates for Wome

From this bar chart on poverty levels, we can see that poverty levels between married women and men are about even. That makes sense because they usually live together and pool their resources.

But for the widowed, 50% more women than men end up in poverty. This could be because women generally earn less than their spouse. They may not have worked throughout the marriage.

Or it could simply be because household income was cut in half when the spouse died.

Once they retire and live on Social Security, it may not be enough to keep them above the poverty if they have no other income from retirement savings.

The highest numbers in poverty after age 65 are people who never married, and this is the only category where men outnumbered women.

Again, this could be due to living on Social Security without additional income from retirement savings.

Retirement Planning For Women Who Are Married

If you're married, you don't know yet which category you'll be in by the time you're 65, but you should consider what might happen if you should become widowed or divorced.

What can you do to make sure you won't fall into poverty if the worst should happen?

You (women) have organizational skills, budgeting skills, people skills, and many more qualities that benefit your spouse and make his life better.

Without these benefits, his life would be harder.

If you were to take a job outside your home, his life would be more complicated.

He would need to pitch in more to keep the household running, participate more in coordinating the family activities, do more for himself, and much more.

On top of that, it would cost something for you to take a job rather than take care of the family. There would be child care expenses, to begin with.

For all these reasons and many more, you are entitled to your own share of the household income, in your own name.

To provide for your retirement, you should have an IRA of your own that is funded to the maximum each year.

If you won’t be able to make up for lost time by starting an IRA late, you should have a separate savings account of your own.

If your family budget has no room for this additional item (IRA and catch-up savings), you should negotiate with your spouse for reducing his savings contributions to allow for yours until there is room in the budget for both.

You may want to get a job to provide funds, or start your own business.

Retirement Planning for Women is SO important, please don't rely on anyone else to plan for your later years!

For Single Women (and Men)

If you're single, the message from the chart above is that you may not be saving enough for your retirement. As soon as possible, change this!

When you reach 65, you may be ready to stop working. Plan for it now so that you won't be scraping by. No matter what field you work in, you need to set aside money for your future.

If there is no workplace savings option, you need to set one up yourself. At the very least you need an IRA that you can contribute the maximum each year.

If you are self employed, after you max out your IRA, find a 401k for self-employed. Most financial services companies, such as Fidelity, offer these plans.

Social Security

Most people rely on Social Security benefits for a large portion of their retirement income.

However, if you don't work enough to earn enough credits, you won't be eligible for your own Social Security benefits.

At best, if you are married at least 10 years (to one person) you may be able to claim benefits against that person's earnings record, but it is usually a reduced benefit.

Take the time now to understand what your options will be so that you can properly prepare.

Many elderly people must choose between food or medicine due to poverty. Don't be one of them!

Talk to others about retirement planning for women so we can help each other avoid elder poverty.

What Women Can Do Now

Retirement planning for women is hugely important, and educating yourself is the first step to planning.

Educate yourself about retirement planning, social security, and perhaps even investing. Talk with your spouse about retirement.

If he has been the only one saving for retirement, let him know that you feel vulnerable (if you don’t, you should - see the real people stories to learn why) and would like to hear about his thoughts for your joint future.

Ask him to read some of the real people stories that might eventually apply to you.

Each person has a responsibility to look out for themselves and their future security.

Women who are wives should not just blindly depend on their spouse for their future security because that is a huge gamble.

People change over time and the person you trust now may not be so trustworthy in the future, but by then it is too late for you to protect yourself. Do it NOW!

Continue Learning About Retirement Planning

I urge you to visit other pages of this site to learn more about retirement planning for women and in general.

Topics that will be especially relevant to you are social security, budget planning for retirement, investment for retirement, and the entire section on non-financial topics.

Look for this Real People Story: Divorce in Retirement

In case you are already close to retirement age, these topics and stories might be helpful to you: Understanding reverse mortgages, and social security tips.

If there is something related to this topic (retirement planning for women) that you need to know more about, please contact me so I can provide more specific information.

I am happy to help.

In the meantime, use the menu on the left to read and educate yourself on preparing for your future.

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