Sep
15

Women Have Unique Retirement Planning Needs

Translating retirement dreams into reality can be challenging-especially for women, who often must overcome unique, gender-specific hurdles to achieve financial security.

The challenges are the lower average income as well as parental custody, senior care and longer lifespans as compared to men. This article series explores these gender-specific challenges to help women become more educated about the financial and Retirement Planning .

As more women enter into the workforce and their earnings increases to a level that is comparable to men’s and women are now able to take advantage of more chances to save and save to save for retirement. However, just boosting women’s financial capabilities is not going to guarantee an improved quality of individual retirement plans, more engagement in plans for retirement, or a higher rate of saving or smarter investing.

The facts are the truth:

  • Women live longer-Statistically, women outlive men by an average of about five years.This implies that they’ll have to save more money because they’ll have longer years to save for retirement.
  • Women are less likely to save-The women’s contribution rate average is 6% compared to. 8.8% for men according to the Ninth Annual Transamerica Small Business Retirement Survey (September 2008) however, the savings rate for women and men is below of the minimum recommended percent.Just 10% of women who were surveyed had household savings of more than $100,000, while 29% of males.
  • Women save later. Women postpone retirement savings later on in their lives than males, meaning they’re less likely to build up a retirement eggs.

Women are less likely to invest- Generally speaking women are less likely to invest because generally, they make less than men.

The rate of poverty for all older women is 13% as per the U.S. Census Bureau in the year 2008. However researchers from the University of Michigan Retirement Research Center (May 2003) discovered that for divorced, widowed and never-married women, this rate rises to 18% or more. A lot of people depend heavily on Social Security as their sole source of income.

Then, you’ll be able to learn more about the differences in pay between women and men-one of the most significant financial issues faced by women when they are planning for the future.

Women save less money since they make less

Despite the accomplishments of women at work, many women remain being left behind in terms of earning the same amount. However, regardless of the measure applied, women’s earnings generally are lower than those of males.

Based on the U.S. Census Bureau, the median earnings for full-time male workers was $43,460 during 2007. According to the same measurement the median income of women was just $33,437. The difference between male and female earnings narrowed just a little. In 2007 the earnings ratio between males and females proportion was 0.78-higher that the prior all-time high of 0.76 which was first reported in 2001.

Different factors are responsible for the earnings disparities:

  • Careers of women are interrupted frequently due to childbirth or childcare care.
  • Women who do gain access to high-paying jobs could be the subject of the demands of time and concentration.
  • Smaller businesses that have smaller payrolls typically use more women and men.
  • Women are less likely than men to have union membership.
  • Women are more likely than men to prefer not to work outside of at home.

In these circumstances, it’s particularly important for women to be more knowledgeable about financial planning and retirement programs, and to take part in the company-sponsored retirement plans.

In the next article, we’ll examine the demands of competition faced by working women, and often do it alone taking care of young children and their elderly parents.

The challenges in caring for children and elderly

Women’s roles as primary caregivers for children as well as elderly relatives can create specific financial strains, making it difficult to save money for the future.

This is particularly the case for women who have custodial parents who are who are dependent upon child support payments which could or may not be available. In the edition for 2005 of Child Support for Custodial Mothers and Fathers in an U.S. Census Bureau report it was estimated that 13.6 million parents were in charge of children who were under 21 years old. In addition, five out of six custodial parents were female.

Mothers who have custody are far more likely to be employed part-time and are the most in requirement of child support. However according to an Census Bureau study found that out of more than 11 million mothers with custody of the nation, only 2.9 million received the entire amount of child support payments as ordered by the court. It is clear that the burden of household and child support is more common for women on a single income-a reality that could have a catastrophic impact on retirement planning efforts.

Care for the older

About one-fourth households in the United States are involved in caring for relatives or friends who are 50 or over. Around 75% of the caretakers are females. (Source 101 Facts on the Situation of Women in Work, released on the 25th of May, 2005 by the Business and Professional Women’s Foundation). It is also noted that the BPWF report also revealed the fact that 27% of care providers are the daughters of the people who receive care and that female caregivers are expected to spend 50percent more time providing the care than male caregivers.

Furthermore, according to the BPWF the employees are much more likely be absent from work and lose their job or career chance, or suffer negative economic impacts.

Then there’s an immediate financial burden. Seniors with a fixed income may be more prone to difficulty paying for utility bills and medical deductibles as well as nursing home care or other expenses. When an elderly parent is just a bit short, the caregiver may have to cover the difference. In addition, this could limit the amount that can be used to put aside to fund retirement.

What can women do to prepare themselves for the future

Financial planning starts by being educated on key aspects of financial management. It’s not as hard as it may sound as it only takes a few minutes to read about finances in a myriad of books on personal finance management and magazines available on the market.

These guides explain the advantages and cons of investment options like mutual funds, variable annuities certificate of deposit (CDs) as well as money market funds as well as other investment options; savings programs like the workplace retirement plan and individual retirement accounts (IRAs) and the idea of risk management via long-term and life insurance.

The next step is to gain an understanding of how to manage your cash. This includes keeping an eye on your account balance, knowing the place your money goes each month, and figuring out ways to cut down on the outflows that exceed your income. Budgeting is the simplest and efficient method to organize your the balance between income and expenditure to identify expenses that require to be reduced , and establish the framework to manage your financial situation.

It’s right time to implement the five-step retirement planning process:

  • Set goals
  • Analyze current financial position
  • Develop strategies
  • Select specific investment options
  • Review and follow up on your plan