Celebrating International Women’s Day: Empowering Women in Retirement Planning

Today, March 8th, is International Women’s Day. With this year’s theme of 'Invest in women: Accelerate progress’, it’s important to recognize the challenges many women still face in their careers and lifetime, including financial and retirement planning.

As we age, our financial well-being becomes increasingly important. Retirement planning is crucial, especially for women who tend to have longer lifespans and fewer pensions than their male counterparts. 

Nearly 50% of women say they feel they are behind when it comes to being financially prepared for retirement. Meaning if you have the feeling you’re lacking in your retirement planning, you’re far from alone. 

Let’s embrace today’s celebration and read, as a woman approaching retirement, how you can gain control of your financial future. Here’s what you should know.

The Unique Financial Challenges Women Face in Retirement

To truly acknowledge the hardships women have had to endure, we need to recognize that women encounter distinct and unique challenges when it comes to retirement income planning, stemming from a variety of unequal factors:

  • Longer Life Expectancy: In general, women have longer life expectancies than men. With a longer lifespan comes the necessity for a larger nest egg to cover living expenses, potential healthcare costs, etc.
  • Lower Lifetime Earnings: Women still face a persistent wage gap. In 2023, women who worked full-time, year-round still only made 83.7% as much as men, which equates to a difference of $10,000 per year. This wage gap can also mean women don’t earn as much on their investments in their retirement accounts. 
  • More Career Interruptions: Women are more likely to be caregivers in the family, whether that be for children or their own parents. Caregiving can affect women’s ability to save if it takes them out of the workforce. Less work hours may also reduce the amount of Social Security benefits they qualify for in retirement.

These realities often translate to less retirement savings and lower Social Security benefits compared to men. Additionally, healthcare costs tend to be higher for women due to longer life spans. These unique challenges emphasize the necessity for tailored financial planning strategies to help ensure women can achieve financial security and enjoy a comfortable retirement.

What Can You Do?

Even after women fought for and won the right to vote in the U.S. in the early 20th century, women could not easily get loans or credit cards without a male co-signer until 1974 and the passage of the Equal Credit Opportunity Act. Today, we still have a gender pay gap, which can negatively affect women’s confidence with money.

If you are approaching retirement and feel left behind by Wall Street, there are specific financial considerations you should keep in mind to help ensure a secure and comfortable future:

  1. Assess Your Retirement Income Sources: Evaluate your retirement savings, including employer-sponsored plans, IRAs, and other investments. Consider how much income you'll need in retirement and whether your current savings are sufficient.
  2. Create a Budget: Develop a detailed budget outlining your expected expenses in retirement, including housing, healthcare, and leisure activities. This will help you determine how much you need to save and how to allocate your resources effectively.
  3. Maximize Social Security Benefits: Understand how Social Security benefits work and strategize to help maximize your benefits. Delaying claiming benefits can sometimes result in higher monthly payments, helping provide more financial security in retirement.
  4. Consider Long-Term Care Insurance: Long-term care costs can be substantial and may deplete your retirement savings. Explore long-term care insurance options to protect your assets and help ensure you have access to quality care if needed.
  5. Diversify Your Investment Portfolio: Spread your investments across different asset classes to help minimize risk and maximize returns. Work with a financial advisor to develop an investment strategy tailored to your risk tolerance and financial goals.
  6. Stay Informed and Engaged: Keep yourself informed about changes in tax laws, retirement regulations, and investment opportunities. Stay engaged with your financial advisor and regularly review your financial plan to help ensure it remains aligned with your objectives.

Financial Equality is Gaining Momentum

Throughout history, women have been led to believe they’re simply not built to deal with finances. But data shows this simply isn’t true. One influential study led by psychologist Janet Hyde involved reviewing data from more than 100 other studies on math performance in children and adults. Findings showed that there is no difference in innate math ability between girls and boys in elementary, middle, or high school. Interestingly, another study found that in lower-income elementary school districts, girls tend to outperform boys in math.

In the coming decades, trillions of dollars are expected to change hands in the U.S. as older generations pass on their assets to younger ones. This is called “The Great Wealth Transfer.” Women are expected to receive a significant portion as a result of several factors, including the increasing number of women who are earning high salaries, expanding roles in financial decision-making, and the fact that women are generally outliving men.

And the monumental strides are being seen across the globe. According to OECD,to date, a wide range of stakeholders in over 50 countries around the world have implemented financial education policies and initiatives addressing the needs of women and girls. Most initiatives have common policy priorities, including: 

  • Addressing the needs of specific subgroups, such as younger and older women, women who live on low incomes and are excluded from formal financial products and services, as well as female small and micro-entrepreneurs.
  • Improving women’s strategies in dealing with financial matters, in particular through improving women’s financial inclusion and use of formal saving products, preventing over-indebtedness, helping women planning for retirement, and supporting female entrepreneurship. 

How NJM Can Help

Consulting with a fiduciary advisor can be invaluable for those seeking help to optimize their retirement savings and investment strategies. Especially when it comes to gaining insightful knowledge and support in this crucial phase of life.

NJM Wealth Preservation Strategies is experienced in comprehensive retirement planning services for everyone. We excel in navigating the complexities of retirement to help maximize your financial security. Our team delivers tailored advice and personalized guidance to each client's goals and needs. 

"As a second-generation wealth preservation advisor, I often hear female clients, of all ages, express doubts about their financial acumen, claiming they're not proficient with numbers or unsure how to approach investment opportunities. However, it's important to note that some of our highest-performing client portfolios are owned by women. My team and I are dedicated to empowering women in financial and retirement planning, and strive to help ensure they never feel left behind, guiding them toward financial security and peace of mind as they approach their golden years. Why? Because they deserve it, and it is their right." - Nic J. McLeod

Final Thoughts

Shifting women’s beliefs about money will require filling in social and cultural gaps with education, access to resources, the instilment of a growth mindset, and reinforcement that everyone is capable of learning.

Having a comprehensive understanding of your financial landscape makes navigating retirement planning significantly easier. Acknowledging the distinct challenges you may face as a woman, bolstering your resources, and enhancing your financial literacy is essential for helping optimize your financial future. 

While it's never too late to embark on retirement planning, initiating the process sooner rather than later is advantageous. If you're a woman nearing retirement or you’ve already made the transition and are wondering what to do next, NJM Wealth Preservation Strategies is here to help ensure you're well-informed and empowered every step of the way. 

Are you ready to start planning for your retirement journey? Reach out today to schedule your complimentary consultation.