There’s no doubt that planning for retirement is a tough task for most Americans, but it can be even harder for women. It’s no mystery why.
The average woman will live five years longer than her male counterpart, according to the Centers for Disease Control and Prevention, which means she needs to prepare for a retirement that is potentially much longer.
Women in the United States earn about 84 cents for every $1 earned by men, according to the National Women’s Law Center, and they spend more time out of the workforce caring for children and parents, according to the Family Caregiver Alliance. As a result, women tend to accumulate less savings for retirement.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
And in the end, many women face retirement on their own. A recent Bank of America study found that almost all women (94%) believe they will be personally responsible for their finances at some point in their adult life.
Whether they outlive their partner, never marry or join the growing ranks of those who’ve gotten a gray divorce, retirement planning challenges can be even more acute for single women. This year, more Americans will turn 65 than at any point in history, and with this milestone, we’re seeing more single women than ever facing retirement without the financial balance provided by a partner.
As a mother of two single, college-age daughters, I spend a lot of time talking with them about preparing for their financial futures. Recently, I challenged my oldest daughter, who is considering a new job opportunity, to look beyond the salary she was offered to evaluate health, retirement and other benefits included in the package. After she put it all down on paper, she was able to make a much more informed decision about how this job may contribute to her financial security now and in the future. I always remind them that it’s never too soon — or too late — for single women to begin to take steps to position themselves for a more secure future.
Guidance from a financial professional is key
The No. 1 piece of advice I’d give to any investor — but particularly single women — would be to engage a financial professional.
According to a recent Nationwide Retirement Institute survey, only one in three women (36%) currently work with an adviser. One in five (19%) older women who are single and work with an adviser say the guidance they received on planning for singlehood in retirement has helped them avoid major financial blunders.
A trusted financial professional can help single women create a holistic long-term plan that takes into account factors like when to claim Social Security, costs for health care and long-term care and income in retirement. And for younger women, that discussion can include short-term priorities like paying down student loans, buying a home and how much they should be saving now.
If you feel you can’t afford to work with a financial professional, don’t assume you can’t access professional guidance. Be sure to explore resources offered by your employer-sponsored retirement plan, many of which offer personalized financial planning services at little or no cost.
Other actionable tips
There are a variety of other ways women can empower themselves, and a great source for advice is women who have reached retirement. In another recent Nationwide Retirement Institute survey, retired women ages 60 to 65 shared advice they wish they could give to their younger selves — young savers should take notice! Their responses were simple and actionable by pretty much anyone:
- Expect you’ll need more money in retirement than you think
- Don’t assume you will be able to work for as long as you’d like
- Start saving and planning early
- Don’t live above your means
I’ll add to this great advice a few more tips for single women that I’ve emphasized for my daughters:
Prioritize retirement savings. Don’t wait to start participating in your workplace retirement plan, or you’ll miss out on the biggest advantage young savers have: the power of compounding interest. Be sure to leverage the full employer match and allow auto increases to accelerate your saving. Remember, saving should not be an all-or-nothing proposition. Start now — even if you have to start small.
Invest in your career. Focus on education and skills training, which can lead to higher income and more opportunities to save in the long run.
Build an emergency fund. Without a partner to share financial burdens, unexpected expenses or loss of income can be devastating. Try to save at least three to six months’ worth of living expenses in an easily accessible account.
Consider your estate plan. Make sure you have a will and consider setting up a trust if you have specific wishes for your estate. Be sure to share your wishes with people you love and trust.
Don’t delegate financial planning. If you’re currently in a relationship where your partner manages financial decisions, start participating now. There’s a decent chance you’ll outlive your spouse — at which point you’ll be glad you had visibility and influence on previous planning decisions.
Whether you’re a young woman early in your retirement planning journey or nearing the finish line, don’t wait to empower yourself to achieve your retirement goals.
This material is not a recommendation to buy or sell a financial product or to adopt an investment strategy. Investors should discuss their specific situation with their financial professional. Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved. NFM-23776AO
Related Content
-
Retire in Costa Rica With These Three Tax BenefitsRetirement Taxes Costa Rica may be a good place for retirement if you like the low cost of living and savings for your heirs.
-
Five Ways to Ease Caregiver StressCaregiver stress is real. Here are five techniques to protect your health and happiness while caring for a loved one.
-
Financial Strategies Borrowed From the Big Game's PlaybookLike the best football teams, you can win at financial planning by executing a strategy, making halftime adjustments and staying focused on the ultimate prize.
-
Three Ways to Plan Now for a Social Security Shortfall LaterThe outlook for Social Security is gloomy, but you can save now to protect against benefit cuts later. If the cuts don't happen, you'll still be better off.
-
Extra Cash? Should You Pay Off Debt or Invest?Depending on your financial situation, you might benefit from paying off debt, investing or both. Here are some things to consider before deciding.
-
The Future of 1031 Exchanges Under Trump Looks BrightAs a real estate investor himself, President Trump appears poised to preserve the tax-deferring power of this strategy. But you still must follow the rules.
-
Gambling vs Investing: How to Tell the DifferenceIt's easy to get caught up in the excitement of placing a bet on the Big Game, but beware of letting that emotion drive your investing decisions.
-
Empowering Widows: Five Goals for Financial Security in 2025Tackling these strategies one at a time, whether it's updating estate planning or reassessing investments, can help put you on track for financial stability.
-
Private Credit: Coming Soon to a Portfolio Near YouPrivate credit could be a good source of diversification for sophisticated investors, but beware of the risks.
-
What Is Insurance Good For? Let Us Count the WaysYou might resent having to pay premiums, but when disaster or just a minor fender-bender happens, you'll be happy you have the financial backup.
