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Why Single Women Need to Up Their Retirement Planning Game

Alexa Kane, CFP®, CDFA™
May 2, 2019

While it’s true that women today have more opportunities than ever before, there’s an area where they’re still falling short – retirement planning.  This is especially true for single women.

Single women’s retirement savings tend to be lower than their married, and even widowed, peers. While widows can face a sharp decline in income when a spouse dies, they often inherit their partner’s assets and spousal benefits from Social Security, a source of funds unavailable to single women. Additionally, single women face unique challenges related to higher costs for retirement living and long-term care.

A recent study looked at retirement security for Gen Xers (those born roughly from 1961 to 1981) and found that 50% of single women are at risk of not having enough money to cover basic retirement expenses.

There are multiple reasons women are behind the eight ball when it comes to retirement preparation and savings:

  • The pay gap. Yes, it still exists. In 2019, women still make only $0.80 for every dollar that men make.
  • Time away from work. As women, we’re more likely to take time out of our careers, whether it is to raise children or care for aging parents and other loved ones.
  • Women face higher health care expenses over their lifetimes.
  • The fact that women tend to live longer means greater lifelong income needs.

So, what can women do to help improve their odds of successfully financing their retirement years?

Start early

Everyone should start saving and investing early, but it’s especially important for women to do so. Research shows that on average, people don't start contributing to their retirement plan until age 31. That means most people are missing out on nearly a decade of savings, asset accumulation and greater compounded returns.

Maximize Social Security

It’s important to wait until your full retirement age to claim benefits. You can begin taking Social Security at age 62 but waiting for your full retirement age (between 66 and 67 depending on the year you were born) helps ensure you will receive the full amount of your benefits. What's more, waiting to claim your benefits until age 70 increases your retirement income even further.

Get guidance

Many women can benefit from guidance on how to prioritize retirement savings while managing day-to-day expenses and paying off debt. Talking with a financial advisor can help women overcome retirement challenges posed by lack of savings, planning obstacles, health care costs and other complexities. Financial advisors can help you balance priorities such as paying down debt and saving for retirement. They can help you use tools like health care costs estimators to better prepare you for challenges you may face in retirement, and a Social Security calculator to help you maximize your benefits.

I’d love to sit down with you to discuss your retirement planning goals and make sure you’re on track by creating a balanced portfolio and tax-efficient income plan for retirement.

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The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.This information does not purport to be a complete description of the developments referred to in this material. Links are being provided for informational purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members. Raymond James and M.J. Smith & Associates does not offer tax advice.

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