Retirement planning as a long time goal is very often overlooked and un-prioritized by many. Northwestern Mutual conducted a study in The United States in 2019. This study revealed that $5,000 or a lesser amount is saved by 22% of Americans for retirement. A minority of 5% have more than $25,000 saved for their future. Another 15%, unfortunately, have not saved any money for the future at all. Committing the mistake of choosing to not save for retirement life can have detrimental effects on retirement living standards, especially in the case of women. Women very often have to face more obstacles and hardships in their retirement life than their male counterparts, and not planning a retirement plan will likely worsen the situation. Here are some of the most common challenges faced by women during their retirement lives.
Challenges Faced by Women During Retirement
Longer Lifespan Compared to Men
National Center for Health Statistics revealed the results of a recent study, which demonstrated the average life expectancies of men and women. According to this study, the average life expectancy of men is 76.1 whereas women enjoy a higher life expectancy of 81.1 years. It is obvious that the longer an individual lives, the more he/she will have to spend to sustain his/her life. As women enjoy a longer lifespan than men, many factors such as housing expenses, health care, daily expenses, and food add up consistently. In the current scenario of great uncertainty and unrest going on with social security benefits, leading a financially stable retirement life without planning is unlikely. Fortunately, there are alternative financial strategies available that enable women to lead an economically sound retirement life.
Wage Gap
When an individual starts off their career, saving up for retirement life can appear to be the least of one’s priorities. With more immediate concerns such as rent and other day to day expenses, many tend to overlook the importance of planning for retirement life. The wage gap is a huge hurdle for women that drags them from saving for financially sound retirement life.
Lower Risk Tolerance
A study made by Investopedia in 2019, revealed that women tend to make financial investments in a more conservative manner. The reasons for a lower risk tolerance may differ, such as the wage gap, which leaves women a lower amount to save for retirement. Regardless of the reasons, lower risk tolerance in investments can often cripple the potential of achieving financial growth.
Health Savings Account
A health savings account can be of great benefit for individuals leading a retirement life. A health savings account is an account advantaged by taxes. Another advantage of a health savings account is that it does not expire. A health savings account can be utilized for meeting certain medical expenses both during and before retirement life.
Many people prefer to not discuss topics involving finance. Some may even find them intimidating and boring. Consulting a retirement professional will be beneficial, especially for women who are nearing retirement.
