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Women & Retirement Planning: 2 Unique Challenges

Who handles the money in your household? If your home is like most, it depends on the kind of financial planning involved. A new study from UBS found that 85 percent of married women handle the day-to-day financial management in their household. However, the same survey found that only 23 percent of married are in charge of their long-term planning. The remainder defer that work to their husband.1

 

Why do so many women defer their long-term financial planning to their spouse? According to the study, 82 percent of women said they think their spouse is more knowledgeable about long-term financial planning.1

 

Partnership is always important in marriage, especially when it comes to financial planning. Finances are often a major cause of arguments and disagreements, so it’s helpful for both spouses to be involved in decision-making.

 

It’s also important for women to take control of their financial future because they may face challenges and risks that men do not face. Below are two such challenges. If you haven’t developed a long-term financial strategy, now may be the time to do so. A financial professional can help you get started.

Longevity

 

People are living longer than ever, primarily because of advances in health care and increased understanding about health and nutrition. However, women usually have the edge on men in terms of life expectancy.

 

According to the Society of Actuaries, the average 65-year-old man has a 50 percent chance of living to 87 and a 25 percent chance of living to 92. However, a 65-year-old woman has a 50 percent chance of living to 92 and a 25 percent chance of living to 96.2

 

This means that many women can expect to outlive their husbands. While that idea may not be pleasant to think about, it’s an important planning consideration. A longer lifespan means a longer retirement. That means you’ll need to make your assets and income last longer so you can live comfortably.

Career Earnings

 

Many women also may earn less over their career than their husbands or even their male counterparts in the workplace. According to a study from PayScale, a salary website, the average woman hits her peak in annual earnings at age 44. Men, on the other hand, hit their peak at age 55.3 PayScale also found that women earn less over the course of their career. The average woman has a peak annual income of $66,700. Men peak at just over $100,000.3

 

There are a number of reasons why this earnings gap exists. Some women may take time off to care for children. Others may sacrifice their career so their husbands can pursue a more demanding and time-consuming career. Others may suffer from the well-known pay gap that exists in the United States.

 

Regardless of the reason, it’s important for women to know that the earnings gap exists so they can plan accordingly. Career earnings often translates into savings. A woman who has less career earnings may also have fewer assets saved for retirement.

 

Ready to take control of your long-term financial planning? Let’s talk about it. Contact us today at Retirement Peace Project. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.

 

 

1https://www.thinkadvisor.com/2019/03/07/many-women-defer-to-spouses-on-big-financial-decisions-ubs/

2https://www.fidelity.com/viewpoints/retirement/longevity

3https://www.cnbc.com/2019/06/11/gender-pay-gap-womens-earnings-peak-11-years-before-mens-payscale.html

 

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

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