Women in Retirement:
4 Realities That Shouldn't Be Ignored
It’s no surprise that men and women are different in many ways, some could even say they’re from opposite planets. While some of these differences are strengths, when it comes to the financial realities of retirement, there are a few unique challenges women may need to overcome — in addition to the retirement uncertainties everyone must face, like inflation, the stock market and rising costs.
The information outlined in this guidebook is not meant to scare you, but rather motivate you to understand some of the biggest risks and challenges you may face, like outliving your spouse and potentially your nest egg.
Married. Single. Divorced. Widowed. All women should be empowered to take ownership of their retirement income strategy.
With proper planning and a little communication, women can help ensure they avoid several financial pitfalls in retirement. But first, a reality check on the road ahead:
With outliving your money is a common concern among retirees, this reality is one that women must face more often than men. While no one can accurately predict how long your individual lifespan will be, women outlive their husbands at a staggering rate of 80 percent.
This means the majority of women will face at least some portion of retirement on their own, even if they are married. Not only do women typically live longer than men by an average of 2.3 years, they tend to marry older men – more than half are married to husbands at least two years their senior – resulting in greater chances they will face at least some time solo in retirement.
Get a plan in place to help ensure that you don’t outlive your money.
Nearly half of women who outlive their husbands wish they would’ve taken a more active role in the finances while their husbands were still alive. Have these financial conversations with your spouse, and don’t wait to do so.
The deck may be stacked against women when it comes to money, so proper planning is crucial
If you’re a woman, there are some very real financial concerns you need to be aware of. While not all of them can be avoided, there are steps you can take to help mitigate some of your biggest financial risks in retirement. Here are examples of the disadvantages some women may have when it comes to investing and retirement planning:
Aside from disability, Social Security benefits paid in retirement are paid based on a number of factors, including years worked and money paid into the system. Benefits are calculated based on a person’s highest 35 years of earnings.
Whether by choice or necessity, many women spend several years out of the workforce to raise children. And if a woman’s total working years are less than 35, the Social Security Administration will add a zero-earnings year for each year that is lacking, resulting in a much lower average and decreased Social Security benefits in retirement.
And as more and more women have to care for aging parents late into their working careers, they may find themselves having to take a hiatus from the workforce again, which can lead to a loss of wages, pensions and Social Security benefits over their lifetime.
Even if you never worked outside the home, you could be eligible to receive Social Security spousal benefits. Sit down with your spouse and determine what your estimated benefit is as a spouse, and also what it would be if your spouse passed away and you received a survivor’s benefit. Never assume you’ll receive the same amount your spouse did if he passes away.
Know what your estimated Social Security benefits would be for a variety of scenarios now so you can make a more realistic plan for retirement.
One thing everyone can do is visit SSA.gov and create an account, then:
Note: Heyday Retirement is not affiliated with the Social Security Administration. Please visit SSA.gov for the most up-to-date information.
A silver lining: Under the right circumstances, ex-spouses can still receive Social Security benefits
Being divorced doesn’t necessarily mean you are not eligible for your ex-spouse’s Social Security retirement benefits. If the following are true, you can be eligible to receive a Social Security benefit based on your ex-spouse’s work, even if he has remarried:
You are entitled to this benefit if you qualify, even if he is still working and hasn’t officially retired yet. This could work in your ex-spouse’s favor, too, if the above criteria are met.
Any change in your marital status may hurt more than it helps
No one wants to think about outliving a spouse, but when it comes to retirement, be sure you have a plan just in case.
Whether it’s a divorce or loss of a spouse, a change in marital status can dramatically change your financial situation in retirement. Potential financial impacts include:
Doing your financial homework now can help save you heartache and headaches in retirement.
Being married is no excuse for a lack of preparation and planning. Don’t leave it up to your spouse to handle the finances in retirement. Regardless of your current marital status, you should know the following:
If you’re single:
If you're married:
If you're divorced:
If you're widowed:
With the right retirement strategy, you can help close any gaps between your retirement income and monthly expenses. But first, you must know where you stand and take action to speak with an experienced financial representative.
Use the retirement income information above as a starting point to meet with your financial representative or, if you’d like to speak with a Heyday Retirement representative about your retirement income strategy, we’re here to answer your questions without any pressure or obligation.
In addition to the concerns that affect everyone in retirement — inflation, stock market fluctuations, rising healthcare costs — on average, women have a unique set of challenges to navigate.
Talk with an experienced representative to make sure you fully understand your financial situation and its implications, and prepare for the chance that you may outlive your spouse.
