The United States has made some huge strides toward equality in the past several decades, but women still face unique challenges when it comes to retirement. These disadvantages don’t necessarily apply to all women, but income and retirement inequalities are still a challenge for many.
There are four specific ways in which retirement poses unique challenges for some women:
- The fact is women, on average, still make less than men performing the same job
- Women statistically live longer
- Women are more likely to be single in their retirement years
- Women tend to have less time in a professional, wage-earning capacity
Although some people may argue that context, experience, geography and other factors play a more significant role in income than gender, the fact remains that women working full time earn 82 percent (on average in 2022) of what a male counterpart in the same position earns.
The most recent Provisional Life Expectancy Estimates published by U.S. government agencies has women living 79.1 years and men living 73.2 years. Since those are retirement years, that means the average married woman will be on her own for nearly six years at the end of her life and will be relying on her own retirement savings plus any spousal benefits she receives via pensions or Social Security.
It’s no surprise that women are more likely to be single in retirement given their longer life expectancy, but it’s more than just outliving a spouse. According to the 2021 Profile of Older Americans, more than half of women aged 65 and older are not married. The study, based U.S. Census Bureau data, found 30 percent of women aged 65 and older are widowed, 17 percent are divorced or separated and 6 percent are single (never married).
Women also hold nearly two-thirds of all student loan debt in the country. The average woman graduating from college in 2021 had $31,276 of debt and an average starting salary of $35,338. Many women have trouble saving in those early years after they finish college due to a combination of significant debt and comparatively low income. This can make things like putting money away for retirement especially difficult during those early working years.
What Can Women Do to Better Prepare for Retirement?
We encourage all women, whether you’re married or single, to read our 10 Tips to Help Empower Women Investors paper. These tips can help ensure women are prepared for whatever the future may hold and insulate them from the common issues that frequently impact women in retirement. These action items include:
- Keep assets in your own name rather than just joint accounts. This is especially important for establishing and building a personal credit score, which may be necessary later in life.
- Gain financial confidence by learning about and being involved with your household’s money management.
- Be involved with your household’s financial decision making.
- Know where all your family’s financial documents are stored and how to access them should the need arise.
- Maximize your retirement savings contributions whenever possible.
- Do your research before choosing a financial advisor. Know their client services record before choosing an advisor.
- Write down your long-term financial plan.
- Always have contingency plans to handle life’s unexpected events.
- Know your family’s assets and understand how to handle your household’s finances, even if you aren’t taking the lead role in finances currently.
- Always plan for your family’s future, even if retirement is still years or even decades away.
Proud to Empower Women in Retirement
The team at Fullerton Financial Planning is proud to empower women who are planning for retirement. We regularly help women plan for retirement and assist couples with benefit planning to ensure widows have the resources they need after the passing of their spouse. If you’d like to learn more about retirement planning or are just looking for investment management services, contact our financial advisors at (623) 974-0300.
