A lot goes into planning for retirement. Learn what factors, including gender, affect the way you should manage your financial planning.
A key goal of investing for retirement is making sure you save enough to make your money last throughout your lifetime. In this regard, women may need to save more than men. According to the CDC, the current life expectancy of female at birth is over 81 years, compared with 76 years for a male. Although the difference in life expectancy may not appear significant, health care and other expenses add up over the course of six years.
Retirement Planning Considerations for Women
When planning for retirement, keep in mind life expectancy statistics are averages and many people live much longer. It is not unusual for an individual’s retirement to last 20 or 30 years or more. The length of a person’s career and how much time an individual has to build retirement assets is also a factor for women. Many women take time off work for caregiving responsibilities, and during these years they may not contribute any savings to their retirement portfolio. In addition, time off from work may affect your Social Security benefits because you cannot earn credits toward Social Security retirement benefits when you do not work.
Estimating How Much You Need to Save
Of course, every woman’s life is unique and many women capitalize on the benefits available to them, including participating in an employer-sponsored retirement plan1 or funding an IRA, to build the assets needed for their retirement. It is important not to underestimate how much you may need or the importance of ongoing contributions to retirement accounts to build assets over time. Although there are no guarantees, the longer you invest, the more likely your contributions may benefit from compounding, when investment gains are reinvested and potentially earn even more over time.
Your financial advisor can help you calculate how much you need to save for retirement. Be sure to consider how you will pay for health care expenses not covered by Medicare or other medical insurance. When considering sources of retirement income, log on to http://www.ssa.gov or review your annual statement to estimate your Social Security retirement benefits. If you find your retirement assets do not provide enough savings, delaying retirement or saving more while you continue to work may be helpful strategies.
To start saving for retirement, contact a Fifth Third Bank advisor today.