Women often face unique retirement planning challenges. Longer life expectancies, career interruptions, caregiving responsibilities, and differences in lifetime earnings can all influence how much needs to be saved and how retirement income is managed.
Understanding these factors can help women make informed decisions and create a retirement strategy designed to support their long-term goals.
Women May Spend More Years in Retirement
Retirement today can last much longer than it did for previous generations. According to the Social Security Administration, the average 67-year-old woman is expected to live to age 88.¹
That means retirement could last 20 years or more. Some women may spend 30 years or longer in retirement, making it important to plan for income needs, healthcare expenses, and inflation over an extended period.
Consider How Retirement Income Will Be Generated
A successful retirement strategy begins with understanding where income will come from once employment income ends.
Potential income sources may include:
- Social Security benefits
- Employer-sponsored retirement plans
- Individual retirement accounts (IRAs)
- Taxable investment accounts
- Pension benefits, if available
- Other savings and investment assets
Understanding how these income sources work together can help create a more sustainable retirement plan.
Retirement Planning for Women Often Includes Unique Challenges
Many women spend time away from the workforce to care for children, aging parents, or other family members. These career interruptions can impact earnings, retirement contributions, and future Social Security benefits.
Other life events, such as divorce or the loss of a spouse, may also affect retirement preparedness. Evaluating these factors early can help identify opportunities to strengthen a retirement strategy.
Balance Growth and Risk
As retirement approaches, protecting accumulated savings often becomes increasingly important. At the same time, retirement portfolios may still need growth potential to support spending needs over a retirement that could last several decades.
Finding the appropriate balance between growth opportunities and risk management should reflect your personal goals, time horizon, and comfort with market volatility.
Prepare for Healthcare and Long-Term Care Costs
Healthcare expenses are one of the most significant financial considerations in retirement.
Because women tend to live longer on average, they may face a greater likelihood of requiring extended care services later in life. While Medicare provides important healthcare coverage, it does not cover many long-term care expenses.
Evaluating available options and understanding potential future healthcare costs can be an important part of a comprehensive retirement strategy.
Evaluate Social Security Claiming Strategies
When possible, delaying Social Security benefits may increase future retirement income.
For every year benefits are delayed beyond full retirement age, up to age 70, monthly benefit payments generally increase.⁴ Determining the appropriate claiming strategy depends on factors such as health, income needs, marital status, and overall retirement objectives.
Retirement Planning for Women Requires a Long-Term Perspective
Retirement planning is about more than reaching a target savings number. It involves creating a strategy designed to provide income, manage risk, address healthcare needs, and adapt to life’s changes over time.
A thoughtful retirement plan can help women navigate the unique financial challenges they may face and provide greater confidence as they prepare for the years ahead.
Understanding Retirement Planning for Women
Why is retirement planning different for women?
Women often have longer life expectancies, may experience career interruptions due to caregiving responsibilities, and can face differences in lifetime earnings that impact retirement savings.
How long should retirement savings last?
Many women may spend 20 to 30 years or more in retirement, making long-term income planning especially important.
When should Social Security benefits be claimed?
The appropriate claiming strategy depends on individual circumstances. Delaying benefits beyond full retirement age may result in larger monthly payments.
Why should healthcare costs be part of retirement planning?
Healthcare and potential long-term care expenses can represent a significant portion of retirement spending and should be incorporated into a comprehensive financial plan.
¹ SSA.gov, 2023
² LongevityIllustrator.org, 2023
³ Medicare.gov, 2023
⁴ SSA.gov, 2023
Disclosures
Investment Advisory Services offered through FAS Wealth Partners, a Registered Investment Adviser with the U.S. Securities & Exchange Commission. Registration does not imply a certain level of skill or training. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. FAS Wealth Partners’ articles and associated links offer news, commentary, and generalized research, not personalized investment advice. Nothing in this article should be interpreted to state or imply that past performance is an indication of future performance. All investments involve risk and, unless otherwise stated, are not guaranteed. Securities may be offered through FAS Corp, an SEC registered broker-dealer and member of FINRA. FAS Corp is an affiliate of FAS Wealth Partners.
