Retirement planning is an important activity that everyone should engage in, but some may have a more vested interest in the subject than others. Long-term investment and financial planning strategies are far from the most exciting topics around, but they are ones that need to be seriously considered in order to have the personal finances needed to support oneself into your retirement years. Women in particular face certain circumstances and statistical trends that will further heighten this need.
This is a slightly morbid point, but it’s one that can’t be ignored. Women live longer than men, which means their retirement plans need to take into account these extra years of living. This is a bit of an issue since, according to Forbes, women generally only plan for the same length of retirement as men and don’t properly factor in their extended lifespan. A related matter is that women also spend roughly twice as much time living with disability as men. The average rate is around three years of mild or moderate disability and 2.8 of severe disability, versus men’s 1.5 years in both categories. The difference is slight, but the extra care required for even an additional year and a half can take a significant chunk out of your personal finances depending on the nature of care required.
You May Outlive Your Spouse
Statistically, women spend more years of their life without a spouse than men do. There are a few different reasons for this, but the main one is that a combination of longer life expectancy and tendency to marry people older than they are means there is a greater chance of women outliving a spouse. In the United States, over half of women over age 65 are widows, and they outnumber male widowers by three to one. The absence of a partner during retirement can place strain on personal finances. Spouses are able to take advantage of better long-term investment opportunities and savings plans and are able to help support one another as physical needs change—thus reducing the need to pay for such support.
You May Not Make as Much
Even if the wage gap matter is ignored, women are statistically more likely to be in situations that can affect their earning power. Taking time off work or moving to part-time employment in order to raise children or to care for a family member reduces earning power. Furthermore, part-time work does not usually offer company contributions to retirement savings or other benefits that are useful for financial planning. It is also much easier to leave the workforce than it is to rejoin it, so regaining previous earning power is not always a simple matter.
Work Towards a Better Retirement with LUSO Federal Credit Union
LUSO Federal Credit Union is a not-for-profit, member-owned financial cooperative dedicated to providing members with quality financial services and products. We at LUSO pride ourselves on serving the financial needs of our members and helping them build savings that can support them well into their golden years. Our services are available in Ludlow, Springfield, Chicopee, Westfield, and Hampden County, Massachusetts.
Feel free to contact our Ludlow branch toll free at 1-844-LUSO-FCU or our Wilbraham branch at 1-800-808-5876.