Women make up about half of the population. But there are many women out there who report that they feel unprepared for retirement. In fact, one survey by the U.S. Census Bureau found that 50% of a group of women aged 55 to 60 years old did not have any retirement savings accounts of their own. That’s a staggering statistic. It signals a need for greater education on the importance of creating your own retirement plan and adhering to it to the best of your ability.

The U.S.’s older adult population is projected to more than double by the year 2040. The Social Security Administration has reported that it will only pay full benefits to retirees up until the year 2035. After 2035 when the Social Security trust fund is exhausted, retired adults would only receive up to 75% of their retirement benefits unless a change is made. With future retirees ineligible for their full Social Security retirement benefits, if you are planning to retire after 2035, you may want to consider as many ways as possible to create a robust retirement savings account that is not dependent on Social Security.

What kind of planning should women do to get ready for retirement?

  • Determine how much you need to save for your retirement — One of the first things you will need to do to get ready for retirement is to determine how much money you will need to save. You will need to consider several factors as you make your calculations, and you will need to account for the kind of lifestyle you are anticipating in retirement.

The factors women planning for retirement need to keep in mind are as follows:

  • Health care expenses — You will need to calculate how much money you may spend throughout your retirement on health care. What type of medical care might you need as you age? Be sure to account for the current state of your health while being mindful that your health may change. Do not forget to include costs like long-term care or rehabilitation. You will also want to be sure to anticipate expenses for routine cancer screenings, like colonoscopies, and any unexpected medical emergencies.
  • Housing expenses — Next, you will want to consider how much money you will need for your housing expenses. Make sure to include costs like rent or mortgage, utilities, water, and regular upkeep on your home.
  • Food and clothing expenses — Another important consideration is how much you might need to spend on clothing and food throughout your retirement. Are you someone who can do with a few, limited clothing options, or do you prefer to switch out your wardrobe frequently? Do you prefer to eat out most nights or will you be eating at home? You will want to consider the kind of lifestyle you are used to right now and the kind of lifestyle you expect to live during retirement.
  • Entertainment expenses — What kinds of entertainment do you prefer now? Will you be continuing with the same entertainment when you are retired? Your retirement budget should account for the kinds of places you will frequent and the ways you will pass your time, whatever they may be.
  • Travel and transportation expenses — If you like to travel frequently, you will need to factor this into your retirement planning. Will you have grandchildren or other loved ones who you will want to visit often? Will you fly or drive? These are the kinds of things you will have to think over when budgeting for your retirement years.
  • Start an emergency savings account — As you save for your retirement, one of the best things you can do to protect your funds is to create a separate savings account. This account must be specifically designated for emergency expenses or any expenses you may not have planned for. This emergency fund is meant to serve as a cushion so that you do not need to cut into your retirement savings or take on debt. It is generally recommended that you save around six to 12 months of your living expenses to account for any emergency circumstances and protect your retirement savings.
  • Create a diversified investment portfolio — Make sure you have a variety of investments that can help create a passive income and ensure a return on your investments for retirement. You will want to make sure that you have intentionally chosen an array of different investment ventures, but not without researching each one carefully.
  • Take stock of your assets — Another tip for women planning for retirement is to take stock of your assets. Make sure to include any real estate or businesses you may own. These are assets that can be used to increase your net worth or be sold to boost your retirement savings or even create passive income during retirement.
  • Plan for the taxes you will owe and ways you can minimize them — One thing to know about retirement is that you will have to pay taxes. However, the amount you pay can be adjusted and minimized, if you use the right financial planning and strategizing. Navigating taxes can be complicated, so it is a good idea to consult with a professional who has experience in tax planning in your state.
  • Take advantage of your employee pension or 401(k) plan — If you are currently employed, it would be advantageous to ask your employer about any available pension or 401(k) plans. If you have not already, you will want to make the maximum contributions to your retirement savings account and at a minimum, maximize any employer-matched contributions.
  • Consider paying off as much of your debt as possible — If you are a woman planning for retirement, you will want to make your best effort to pay off any debts you may have. Doing so will minimize the number of expenses you will be responsible for during retirement. Not only will it lower the expenses you will be responsible for, but it will also free up your money to spend how you wish during your retirement. However, some debt offers tax benefits and may be at a lower interest rate than you could make investing the funds, so your individual circumstances need to be analyzed. 
  • Determine what types of insurance you will need for retirement — It is also important to make sure that you have the right insurance to protect yourself and the state of your finances. You may want to consider a few different types of insurance like health insurance and long-term care insurance. Whether you get these insurances is up to you, but is important to look into if you are a woman doing retirement planning.
  • Speak with a qualified CERTIFIED FINANCIAL PLANNER™ professional — If you are a woman interested in retirement planning, one of the most effective ways to plan ahead is to speak with a qualified CFP® professional. Financial advisors are experts at anticipating retirement costs and helping you live the lifestyle you have been looking forward to. You do not need to plan for retirement alone. An experienced specialist can guide you through each step of the process.

If you are a woman, why should you create a personal retirement plan?

As a woman in the United States, you are best prepared for retirement by planning with the assistance of a CFP® professional. Many women find themselves unprepared for retirement because they left the finances to their spouses. However, you can take matters into your own hands and protect your financial security by planning for your own retirement today. A financial planning advisor who specializes in retirement planning can help you take control of your future and set you up for success. Whether you are single, married or widowed, your future financial security can be improved through retirement planning. Do not wait to speak with a CFP® professional about your plan for retirement. 

Talk to a ProVise CFP® professional about retirement planning for you today

At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We work to get to know you as an individual so that we can help you get to where you want to be. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.

We are a financial planning group that values financial independence for women, which means we will do our best to help them plan for retirement.

If you want some help navigating the retirement planning process, our team at ProVise is ready and willing to provide you with a variety of services. Are you ready to talk to a professional about retirement planning for women? Contact ProVise today to schedule a complimentary consultation.