Why Is Planning for Retirement Different for Women?

The answer:


Do you have some idea what these numbers represent? A hint: They are some of the most important reasons why planning for retirement and living in retirement will be different for women.

Now that you’ve had a minute to think about these numbers, let me shed a little light on them.

First: 12,775. This is the number of dinners you’ve probably made over the last 35 years, or will make by the time you reach about age 60. Every night. For you and your family. The longer you live, the more dinners you’re going to make, like it or not!

Dinner time, between 5:30 and 8:00 p.m., is prime time for most of us. We’re still revved up from our day job and have some energy to be productive. We may be tired, but we haven’t yet collapsed on the couch. It is a time of day when we can still take on mental tasks such as reading about money, learning about investing, and planning for long-range goals like a secure financial future. Yet, most women find themselves standing in the kitchen trying to assemble something resembling a healthy dinner.

According to the latest Bureau of Labor Statistics “American Time Use Study” (released June 2015), 69% of women do “food preparation and cleanup” every day. Forty-three percent of men do the same. Women spend on average 1.2 hours per day in this food prep category vs. about three-quarters of an hour for men. These are simply averages. Those of us who actually do the planning, cooking and cleaning up know that it takes a lot longer than these numbers indicate to pull off a dinner. Let alone 12,775 of them!

Most women will say that one of their key problems in preparing for retirement is finding the time to focus on planning for it. We are simply too busy. After working all day, running a family and a home, and then making dinner, there is no bandwidth to learn the fine art of retirement planning. In prior generations, it was often the case that the woman was taken care of financially by her husband: his pension, savings, investments, and Social Security. But that model no longer applies for most women. Finding the time to do the proper amount of financial planning is simply a must-do. Each of us women has to add retirement planning and investing to our long to-do list.

Second: The next reason planning for retirement is different for women is the 66.2% number. If you think about all of the older people you know, how many are women? Of your family and friends in their 90s, how many are women? Think of long-time married couples who have lost a spouse. Who is usually the surviving spouse?

The bottom line is that most people who reach older ages are women. There is a significant shift that occurs after age 65 in America:

  • From ages 65 to 69, there are slightly more women living than men. About 53% of this population is female, 47% male.
  • From 75 to 79, about 56% of the group consists of women vs. 44% men.
  • But by age 85, females make up a full 66.2% of the living. Only 33% of this age group is male.

The odds of a woman living a long time are favorable. This means she needs to plan not only for her retirement, but understand that at least part of her retirement will be flying solo. In reality, many women will live nearly 40 years in retirement! This is a remarkable challenge. You’ll be dealing with your physical and mental health as well as managing your financial health, possibly when you’re in your 90s and beyond.

Living longer should be celebrated and embraced. Unfortunately, not enough of American women plan properly for this likely reality.

We’ve been too busy making dinner!

Third: Another important reason why retirement planning is different for women is $1,043. Do you recognize this number and why it is so critical to know? Before I give you the answer, think about how much money you spend today to run your household. Approximately how much do you spend for your mortgage or rent, food, health care, transportation, clothes and shoes, gifts and so on? Would you say you spend $3,000 a month? Or $5,000? Or $10,000?

The average Social Security payment for women in 2015 is $1,043 per month. That’s only $12,520 per year. Are you surprised?

Calculating the average benefit amount is rather complicated, but it largely depends on your personal work history and level of earnings. For many women, careers have been interrupted or disrupted by family responsibilities and other obligations. That translates into lower earnings, a shorter work history, and less money in retirement.

How far will $1,043 go to support your household when you’re living in retirement? This number is not meant to distress you. Rather, it should be a reality check to get you looking into your own Social Security numbers. It’s critically important for you to know your Social Security retirement benefit estimates and to do the math before you make any specific decision to claim. Find your latest estimates on the Social Security Administration’s website at the “mySocialSecurity” tab. You’ll see three critical numbers on your statement:

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1 Comment

  1. Once again, Marcia hits the nail on the head. These numbers are very important to women as they plan for their retirement. I do recommend her book: What’s the Deal With Retirement Planning for Women. It’s packed with useful info and resources but is easy to read and gets you gets you thinking about how important planning for your personal retirement is. You can see my review on Amazon. Great job, Marcia!

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