For the majority of our lives, we wake up, commute, work for 8 hours, commute home and get ready to do it all again the following day. It’s not surprising that the relaxing days of retirement are something that many of us look forward to. And while it’s true that retirement gives you the opportunity to spend quality time with loved ones, enjoy favorite pastimes, volunteer in the community and travel, retirement also unfortunately comes with many stressors.
The biggest concern that most retirees face is more often than not financial security, and saving for retirement has unfortunately proven to be much harder for women than men.
A Common Worry Among Women
The ability to retire without the worry of outliving your savings is every worker’s main goal when planning for retirement, but men typically have an easier time achieving that goal. According to the National Institute on Retirement Security, women aged 65 and older typically have 25 percent less income in retirement than men, and by age 80, that number increases to 40 percent.
As a result, women are 80 percent more likely to be impoverished by age 65, and women between the ages of 75 and 79 are three times more likely fall below the poverty level
But why exactly is saving for retirement so much more difficult for women than men? There are a few reasons why the retirement age for women has steadily increased over the past several years:
- Lower Salaries. Despite what skeptics in the wage gap debate perpetuate, the reality is that the average working woman earns less than her male counterpart. In fact, the median wage for women is 80 percent of men’s, and a lower income means less money available to save for retirement.
- Child & Adult Care. More women stop working to raise children or to care for an aging parent or relative than men, which eliminates the possibility of contributing to a workplace retirement account, like a 401k or a 403(b). Even if women return to work after caring for children or an aging parent, they are less likely to make the same amount of money as they would have had they not temporarily taken themselves out of the workforce.To complicate things even further, 66 million Americans are members of the sandwich generation, meaning that they simultaneously care for a child and an aging parent. This situation often creates financial strain, making it difficult to put aside money for retirement.
- Longevity. Another element that is drastically changing the retirement age for women is the fact that they are simply living longer than men. According to the United States Department of Health and Human Services, the life expectancy for women is 81.2 years compared to 76.4 years for men. Due to this higher life expectancy, women need about 20 percent more in retirement savings than men in order to pay for their medical bills as they age.
- Rising Costs of Health Care. Longevity isn’t the only reason, however, that women need to set aside more retirement savings. The cost of health care is expected to increase an average of six percent each year. This steady increase would make it tough for women to cover their health care expenses, especially if savings have already been used to pay for a spouse’s end-of-life care bills.
How to Start Saving Money for Retirement
Learning the obstacles women face when it comes to saving for retirement can be scary and intimidating, but it’s never too late to learn how to start saving money. No matter where you currently are financially, there are a few things you can do now that will help you save for retirement:
- Get educated. If you’ve ever felt uncertain about your financial decisions or wish you knew more about financial planning, there are plenty of free classes and resources available to you. AARP’s Foundation Finances 50+ program, for example, involves three workshops designed to help you budget, manage debt and develop a savings plan.
- Keep working. A recent study found that more women are working full-time jobs in their 60s and even in their 70s. Although this increases the retirement age for women, it does make saving for retirement much easier as these jobs typically come with employer-based health insurance and even higher Social Security payments. While it’s not ideal, there are ways you can make it work for you since Baby Boomers seem to be in high-demand at lots of companies these days!
- Get the most out of senior discounts. A 10 or 15 percent discount may not seem like much, but consistently taking advantage of the best senior discounts will help you save a lot of money in the long run.
- Be proactive about your health. Millions of older adults fall every year, resulting in serious -- and expensive -- injuries. The good news, however, is that the sooner you receive help after a fall or medical emergency, the greater the chance of the medical costs being lower. With Medical Guardian’s affordable medical alert systems, for instance, you will always have access to instant help in an emergency, which is a great step towards being proactive about your health.
- Seek help. If you’re still not sure how to start saving money, make an appointment with your insurance agent, accountant, financial planner or even a family member who can help you understand your options. It’s never too late to start creating positive habits that will boost your health and financial security during retirement, but the key to achieving peace of mind is being active now rather than later.