Investing for retirement can be a challenge for anyone, but women, in particular, face many unique challenges when it comes to building a proper nest egg. Consider the following:
Women continue to earn less than men. Women earn roughly 77 cents for every dollar a man earns. (American Association of University Women, 2012)
Women typically work fewer years than men. The average woman spends 12 of her working years outside the workforce caring for children and/or elderly parents. Women are also more likely to work part-time. (Women’s Institute for a Secure Retirement, 2008)
Women live longer than men. At age 65, average life expectancy is nearly 20 years for American women and just over 17 years for men. Thirty percent of all women and almost 20 percent of men age 65 can expect to reach 90. (Social Security Administration, 2010)
Women are likely to spend some of their retirement years alone. Due to widowhood or divorce, only 13 percent of women age 85 and older are married with a spouse present. (Women’s Institute for a Secure Retirement, 2008)
This combination of pay inequities, reduced time in the workforce, and greater life expectancy means that many women find themselves behind the eight ball when it comes to their finances.
According to the Social Security Administration, in 2010, the average annual Social Security income received by women 65 years and older was $11,794, compared to $15,231 for men. Forty-eight percent of all elderly unmarried women receiving Social Security benefits relied on Social Security for 90 percent or more of their income.
Proper planning can improve your chances of achieving your financial goals. Your first course of action is limiting your spending from paycheck to paycheck.
If you’re married, have an open and honest discussion with your spouse about your finances. Don’t defer to your spouse; instead, take an active role in your financial future. Whether you’re married or not, you’ll want to get started on developing a savings plan, establishing a budget, setting aside money in an emergency fund, and investing for retirement. If your employer offers a retirement plan, such as a 401(k), enroll and start contributing as soon as you can. You should also consider opening an individual retirement account (IRA) or a Roth IRA. If you are married, be sure to learn about your spouse’s employer-sponsored retirement plan and make sure your spouse is contributing. If this is a second marriage, make sure you have written confirmation that you are the primary beneficiary on your spouse’s retirement plan, IRAs, and insurance policies. This is a great time to update your beneficiaries as well.
How can a Financial Advisor help?
We provide perspective on what you should be doing to help strengthen your financial life as you work toward retirement. As your Financial Advisor, we can also help you select specific investments and manage the day-to-day decisions involved in maintaining a successful investment portfolio. Simply put, women often live longer than men. It is highly likely you will be responsible for your own financial affairs at some point in your life, if you are not already there. Take an active role today by contacting Kim, Korey, or Tyler at Kletschke Wealth Management Group.
Kletschke Wealth Management Group 700 4th Street, Suite 100 Sioux City, Iowa 51101 (712) 252-6931 [email protected]