Retirement planning for women can be tougher than it is for men.
There are a number of factors that contribute to this. By identifying these factors you can be in a better position to protect yourself and put together a better retirement plan.
First of all, the following 5 reasons will not apply to all women. These are not blanket statements that are applicable to every woman. I have personally seen women that definitely avoid some/all of these mistakes. Think of these “5 reasons” as a list of general pitfalls that are more likely to affect women than men.
1. The first reason is women may have less years in the workforce compared to men. This is because women often times take time off work to raise children. Not only that, but they are more likely than men to take time off work to care for sick family members.
2. The second reason is women may be more conservative in their investments. Once again, this is not a blanket statement. I have personally seen clients where the wife will take more risk on her portfolio than the husband will on his. Nevertheless, it serves as a good reminder that being too conservative on your investments may be a risky thing. Typically, more conservative investments will have a lower expected rate of return compared to more aggressive investment. The lower the portfolio’s return the harder it will be for it to grow large enough to support your retirement goals.
3. The third reason is women don’t necessarily plan for themselves. Again, I have seen women that are very good at making decisions and plans for their financial future. But this pitfall is one that all women will want to avoid. If you don’t take an active role in financial/investment decision making, you could regret it in the future. Be sure to speak up on what your financial goals are. And don’t be afraid to “veto” some plan that a husband, or advisor, may be recommending if you don’t feel comfortable with it.
4. The fourth reason is that women statistically live longer than men. Since women on average live longer then men, that means their retirement nest egg must last longer. Living longer means your retirement savings must last longer to support your lifestyle. While everyone needs to be concerned about not outliving money, women should take extra care in their retirement planning on this point.
5. The fifth and final reason is that women may place other people’s needs before their own. Caring for others in need is a great trait to have. But it can be taken too far. In retirement, the first priority is taking care of what you need. When you have yourself taken care of, then you are in a much better position to help others.
You can read the full original article at: www.thestreet.com/story/12878420/3/5-reasons-retirement-planning-is-tougher-for-women.html