Up and down stock markets, stagnant wages, and slumping economic performance are all threats to anyone's ability to retire. If you couple in factors such as age when you start saving or even gender, you will find that there are other challenges facing Americans who want to retire. Believe it or not, women face a variety of challenges that men do not when it comes to setting aside a nice nest egg for their golden years. From widowhood to unexpected "gray divorces," there are many challenges for women to overcome. Below, you can read about three of the primary challenges facing women in retirement.
Women Earn Less
Although the fight for equality in the workplace is showing signs of improvement, the statistics, when it comes to income, show that women still have a long way to go in equalizing the gender pay gap. Women will earn, on average, 20% less than a man for performing the same job. This means that women are also contributing less to Social Security each working year during their career, resulting in Social Security payouts during retirement that are often 23% smaller than those received by men. All in all, women have 42% less retirement income than men.
Women Live Longer
One of the greatest retirement challenges facing women arises from an overall life benefit. Women, according to multiple studies, live longer than men. On average, women in Sweden tend to live 5% longer than men. It is more than just genetics too. Women tend to drink and smoke less than men, and in many cases maintain a more active lifestyle. So, the good news is that women live longer.
The downside is, of course, that a longer life means more expenses. That is more years to pay for a place to live, cars to drive, food to eat, and entertainment. The biggest impediment of a longer life though has proven to be healthcare. With the cost of healthcare continuing to rise and inflation an always-present threat, women end up spending $79,000 more during the course of retirement than men do.
Women Have Fewer Years of Earned Income
Finally, women tend to have fewer years of earned income to use in building up a healthy retirement portfolio. There are threats to a woman's earning ability at both ends of her career. Some women get a late start and can save less over the long haul if they have children first and pursue a career second. Women have also been found to be the more likely individual in a couple to redirect money to support adult children. More women are having children at older ages, meaning some women approaching retirement are still caring for minors or paying for college.
Yet another challenge facing a woman's ability to save for retirement is the caretaker role. Women are more likely to retire early to care for a disabled adult child, an aging spouse, or an elderly parent. In any case, women tend to have fewer years in their career field in which to save up money for a comfortable retirement.
Contact Manhattan Ridge with any questions about your retirement plan today.