How Women's Retirement Risks Are Different Than Men's

Women - Here Are Ways You Can Take Action to Plan For Your Retirement

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Women, here's how to plan for a happy retirement. OJO Images/Getty Images

January 21, 2015

Research shows women approach retirement decisions and retirement risks differently than men.

Below are four key differences noted in the 2013 retirement survey report, Impact of Retirement Risk on Women, provided by the Society of Actuaries.

1. Women More Likely to Be Involved in a Care Giving Role

Women are far more likely to be involved in a care giving role than men. Whether it be their spouse, a parent or their spouse’s parent, a sibling, adult child, or elder neighbor or friend, women tend to take on care giving roles and often use their own financial resources to help.

In many cases the need or desire to provide care is a significant factor that causes women to enter retirement sooner than they had planned.

Bottom line: Women, be cautious about using your own financial resources to provide care giving for others. Consider the impact of leaving the work force early, and if you think care giving is a likely role you will take on, be sure to build your retirement plan around a potential early exit from the work force.

2. Women More Likely to Be Alone

Due to divorce, widowhood, and living longer, women are more likely to be alone in older age than their male counterparts.

Interestingly enough, sixty percent of males age 85 and over are married, while only 15% of women over age 85 are married. Women are simply less likely to remarry after divorce or widowhood. Divorce and widowhood have a financial impact too; women tend to suffer an income loss and asset loss and financial resources are often depleted with the first to die.

As far as living longer, approximately 60% of women alive at 62 can expect to live to age 90, yet women tend to underestimate their life expectancy more than men do. Because women tend to live longer they are likely to require a longer period of needing assistance with daily living and health care needs.

Bottom line: Women, you need to be smarter in divorce, and you need to carefully evaluate your Social Security claiming options around spousal and widow benefits. In addition, if your husband was the higher earner, you need to be part of his Social Security claiming decision and encourage him to delay claiming until age 70, as that will maximize your survivor income. You’ll also want to project your retirement income needs over a longer time horizon than you may have thought; preferably to age 90 or beyond. In addition, consider long term care insurance to cover later life health care needs.

3. Woman Have Shorter Work Histories

Women have, on average, a work history that is twelve years shorter than men. They often stayed home to raise children, care for a spouse or in-law, or left paid employment due to their spouse retiring.

Because women tend to have held more temporary and part-time work they have lower career earnings, which means lower Social Security and pension benefits.

Bottom line: Women, consider the impact of leaving the work force. If you are single try to delay the start of your Social Security benefits until age 70. If you are married make joint decisions with your spouse to maximize survivor benefits from his Social Security and pensions.

4. Women More Likely to Seek Professional Advice

Overall women expressed more concern than men about both current and future finances, and seemed more open to seeking professional advice from a financial planner.

While women expressed less confidence about their finances than men, women are more likely to have planned for changes in mental and physical abilities, and more likely to turn to communal living or use paid help.

Bottom line: Women, do what you need to do to gain confidence in your finances. That may entail reading books, attending classes, using online retirement calculators or seeking professional financial advice.