The impossible fantasy of living forever isn’t as great as it might seem, especially when you have to account for things like bills, expensive healthcare, and living on a fixed income while your expenses continue to rise. But, can you save more? Can you save more money for retirement?
We may not be technologically advanced enough as a society to keep people alive indefinitely, but there is a very real trend related to this issue that not enough people are paying attention to. Women are living longer than men but only saving half as much for retirement.
Whether you are a woman, married to one, or have a sister/daughter/niece, it’s critically important to spread awareness to other women about the necessity of saving more money for retirement.
How To Save More for Retirement
Longer Lifespans
Many studies from countries around the world consistently find that women tend to live longer than men. American women are no different. They have average lifespans of 81 years compared to American men’s average lifespans of 76 years. These differences could be due to any number of factors, such as biology, risk aversion, lifestyle health decisions, and so on.
Regardless of the reasons behind women living longer than men, the fact remains that women need to put more money into their nest eggs to ensure they don’t run out of money during retirement. You need to save more.
Fewer Years in the Workforce
Not every woman has children during her lifetime, but those who do are at a serious disadvantage in both the short and long run. Unless a woman works for a company offering paid maternity leave, she risks losing out on income opportunities in that final month of her pregnancy and however long she stays out of the workforce after.
This creates long-term consequences for women who have kids because they will likely put less money into retirement during maternity leave. And this could affect how much money they receive from pensions and Social Security later on. This problem only gets worse for women without paid maternity leave, women who have multiple kids, and women who leave the workforce altogether for the first few years of their kids’ lives.
Another similar problem involves women contributing less money to their 401(k)s or IRAs to save more money for expenses related to their kids.
Lower Average Incomes
In addition to living longer and taking more financial hits for deciding to have children, studies have shown that women tend to dominate lower-paying careers such as social work and teaching. On the other hand, men typically dominate higher-paying fields in STEM, law, and business.
Regardless of current studies and opinions on the existence of the gender wage gap, the fact remains that women generally make less money than men.
Obviously, this doesn’t account for all working women. There are plenty of women working as lawyers, CEOs, stockbrokers, and education administrators, but the statistics don’t lie. Women should spend time calculating their expected retirement income needs many years in advance, if possible, to avoid running out of funds during retirement.
Higher Health Care Costs
Unfortunately, there’s more bad news for women when it comes to retirement planning, and that’s higher healthcare costs. Research conducted by Medicare/Medicaid found that, on a per capita basis, elderly women’s healthcare expenses cost roughly $19,110/year, which is 9% more than the average elderly man’s annual healthcare expenses. The same research also found that nursing home spending for women costs twice as much as nursing home spending for men.
What does this all mean?
Clearly, women need to save more money for retirement not just because they’re likely to live longer and have to cover non-discretionary expenses, but also because their healthcare needs may cost substantially more as they get older.
Jumpstart Your Retirement Investment Strategy
Despite all this doom and gloom about retirement, there are plenty of ways for women to increase their retirement savings. They can start by educating themselves on the necessity of saving as early as possible and adding appropriately aggressive investments to their portfolios to avoid under-saving.
Women could also look into unique ways to make money during retirement, actively discuss life insurance policies with their spouses, and perhaps consider getting a part-time job or side hustle while staying at home to care for the kids.
It is perfectly possible for anyone to save for retirement on a limited budget. It’s even more important for women to get involved in their own retirement plans so they don’t run out of funds if they happen to outlive their nest eggs or spouses.