Retirement planning is a bigger challenge for women than men, but despite this, we see a lower awareness level among women about the need to plan retirement. This negligence/ignorance is further aggravated by the nature of being dependent on their husband for financial security.
Working women are generally so engrossed in balancing their professional and family life, that they hardly get time to think about something that is so far in the future. But women should realize well that they need to do more for retirement than their husbands if they want to maintain their lifestyle and do not wish to depend on others for their financial needs.
Why the need for retirement planning is greater for women than for men?
Globally, we see more widows than widowers, as women tend to live longer than men. The gap gets even larger among older population as women tend to marry men who are at least 2-3 years elder. A longer life implies that you need to save more for your retirement days when expenses generally tend to shoot up because of medical needs.
Moreover, the average earning span of women is shorter than the average earning span of men, because women need to take more days off from their work to attend to family needs and this also has an indirect impact on their professional growth.
Women also have to work for several years on a part-time basis to ensure adequate care for the children and elderly, and this limits their earnings and growth potential. Since they work part-time, they also do not become eligible to participate in employer-sponsored retirement plans
With so many pressures, it becomes all the more crucial for women to be aware of their retirement needs and save accordingly so that they don’t face a situation in which they run out of money or have to cut costs by lifestyle changes to extend the retirement savings longer.
Retirement Planning – What women should know and do?
As it is understood in most cases, women’s earning span is limited, while their retirement needs are much larger, hence they should plan to save more aggressively and start early. While they start saving, it is also important that they have a realistic assessment of the retirement age, their career path and the duration of employment as that would determine the quantum and duration of savings in Pension plans that they would need to make.
If it appears that the retirement savings that are required would be greater than what you can afford to allocate for your retirement plan, then efforts should be made to balance this difference by generating some income out of the planned investment or by cutting down on some unwanted expenditure so that you are able to invest more in retirement plans.
It is always best to seek advice from an expert to understand the investment that would be required to meet your retirement needs. An early start as far as investment in pension plans is concerned should be the ideal way to go, as your savings get compounded for a longer duration, helping you get more out of the same.
Besides deciding on how much to save, it is equally important to know where you invest. Depending on your individual needs and your savings/earnings profile, an adviser can help you choose the best pension plan. A comparison of quotes and the features are available for online pension plans and you may choose the plan that would best fit your needs.