6 Overlooked Retirement Planning Challenges Most Women Will Face

No matter who you are, retirement planning is necessary. An essential aspect of creating an effective plan is knowing and understanding our unique needs, which has a lot to do with which stage we are currently at in our lives, and can also be influenced by our gender. A man in his 40s may have different challenges and advantages when planning for retirement compared to a 40-something working woman, who is statistically most likely to be still heavily involved in raising a family at home.

While these are just two examples, and certainly not the only two life situations a person may face as they plan for the future, we decided to address some of the unique challenges women face during the retirement planning process. These factors are often overlooked or not realised by many women in the planning phases of their lives. With these obstacles, there are also ways to overcome or approach each issue, which we will also discuss.

Women Tend To Be More Concerned about Retirement

Generally, both men and women view and approach important issues and life decisions differently. For the most part, women instinctively like to feel secure both in the present and in the future, so they thrive better knowing there is a solid plan actively in place, should something go awry. Men, on the other hand, are more likely to address issues as they arise rather than put together a solid plan in advance.

This is not to say that men do not plan for retirement – instead, they typically have less anxiety and stress about the future and are willing to take things a day at a time. Whereas women tend to be more concerned about the future, so retirement planning may feel emotionally and mentally exhausting for many women – especially for those who may be in their 40s or 50s who may feel as though they are falling short on the planning side of things.

As the retirement stage gets closer for more women, they may feel inadequately prepared for the future. This is an important challenge more women need to understand because it may greatly impact their ability to put a solid plan in place and stick to it. If this sounds familiar, sitting down with a qualified and experienced planner who takes the time to understand your unique needs and challenges may be in order. It is never too late to start putting together a plan with which you can feel confident and more secure about.

It’s a Fact, Women Live Longer

On average, women outlive men by at least three to four years, if not longer*. Women in general have a longer life expectancy compared to men, which means they need to plan to put aside more retirement funds. Additionally, many of the women who outlive their male counterparts also experience some sort of disability in their final years, and for longer periods of time.

*Source: Aging Statistics Posted by The Australian

This makes it even more challenging for women to plan because they need to factor in extra funds to cover at least an additional 4 years of expenses, plus more for possible medical needs. When you find a financial planner you can trust, be sure to address this essential aspect of future planning with them to avoid the challenge we will be discussing in our next point.

Inaccurate Planning Goals

Now that we know women, for the most part, are expected to live longer than men by a significant amount of time, planning horizons should fall in line with this. Most women tend to plan for the same amount of retirement years as men do, which is where many women fall short on the planning side of things.

While we know nothing is guaranteed when it comes to how long our final years will end up being, regardless, it is recommended that women also plan ahead for the years when they might have outlived their male counterparts. The crossbars are just not the same and cannot be compared – this is a huge retirement challenge for women, because essentially, they now have to try and find ways to grow their retirement fund to include an extra amount of time, causing them to stretch themselves even further.

Family Challenges

In times past, there was much more family support for elderly people. Traditionally, aging parents were often able to rely on the help and support of their adult children, which often made the risks much lower. We know that today, our aging population generally has much less support, which often results in more elderly people spending time alone with little to no family support at all.

Of course, every family situation is different, so the future is often uncertain when it comes to family matters. Since women want to feel secure, they may end up feeling a little less secure when their adult children permanently move to the other side of Australia or altogether out the country, which could make planning for the future a little daunting and scary.

In a case such as this, it is important to consider where you plan on living out your retirement years. This may significantly affect the amount of funds you should put aside as some prefer to retire in a retirement village rather than living in their family home alone. Each situation will be different, but nonetheless this aspect should be considered when planning.

Reasons for Retirement  

A women’s decision to retire is likely to be influenced by other factors other than reaching her retirement age or stage of life. Predominantly, women want to retire when their spouses do, or if their spouse or other family members require at-home care. The majority of these situations are very difficult to accurately forecast in a retirement plan – however, they should at least be taken into consideration when planning.

As an example, it is important to ask ourselves important questions about the health of our significant other, or possibly any elderly family members such as parents. Another important aspect of this planning process to consider is planning for retirement together with our significant other and creating a plan that works for both of you, both collectively and individually.

Caregiving Challenges

Providing caregivers for children (whether ill or disabled) or other aging family members is an expense few people can afford. More women than we often realise actually end up leaving their jobs earlier than planned in order to provide care to other family members, which means their earning years are cut short and their ability to grow their retirement fund comes to a screeching halt.

When planning, it is important to carefully consider ahead of time what you will do, should a situation such as this arise. Can some costs be reasonably covered without sacrificing your own financial situation? This question, along with many others, will be difficult to answer and decide in advance, but nonetheless are an important factor in a woman’s planning process.

Investment Challenges

Invest or not invest? This is often the question. Few women are willing to take chances on making investments, sometimes due to misunderstanding them and their associated risks. Investing may not be for everyone, but it has the potential to help women planning for the future quickly grow their funds or possibly provide some residual income over the long or short term.

We cannot advise here what may work best for you, but talking with an experienced financial advisor on the Sunshine Coast may help you get a clearer understanding of how investing could work for you and your retirement plan.