When many people imagine retirement, they think of a mythical front porch, with two people sitting side-by-side on rocking chairs, whiling away the hours. But a different reality might disrupt that vision—and it’s not just that you plan to be globe-trotting instead of aging quietly.
Today, women are much more likely than men to live solo in their golden years, a situation that requires women to take retirement savings seriously.
The biggest factor at play is women’s life expectancy, which is several years longer than men’s. Forty percent of women over age 65 are widowed, compared with 13% of men. And the divorce rate for couples aged 50 and older has doubled since 1990.
Longer Life Comes with Extra Costs
Greater longevity means that, on average, women fact higher healthcare costs in their retirement years. A healthy 65-year-old woman retiring this year can expect to spend an average total of $306,000 on health care during her remaining life (including supplemental insurance, dental, vision and hearing care, and out-of-pocket expenses), compared with a 65-year-old man’s $260,000, according to a recent survey from a software company that specializes in healthcare cost prediction.
Other Factors Negatively Impact Women’s Retirement
We earn less throughout our lifetime—and often retire sooner than we’d planned. Because women still make just 80 cents to a man’s dollar, we deal with a compounded income loss—which also means we earn less Social Security over a lifetime, because that benefit is tied to income. Women are also much more likely than men to have their earnings interrupted because they stop working to have babies, raise children or care for sick family members.
Meanwhile, although women save at higher rates than men, they invest less and therefore earn lower returns. It is wonderful that women are generally level-headed planners who set aside money, but compounding works against you here, too. Financier Sallie Krawcheck, a self-described “financial feminist,” calls this “the gender investing gap.”
What Are You Supposed to Do about All That?
Take your wonderful, long-term-plan-driven orientation, focused on achieving concrete goals for yourself, and do the following:
Don’t Overthink—Make a Solid Plan and Lock It into Place
Research from giants like UC Berkeley’s Haas School of Business and other sources consistently finds that women are actually better investors than men. So let that allay any lingering concerns you might have about not knowing how to “play the market.”
The primary reason we are better investors than men is because we don’t try to play the market. Women tend to commit to “the long view,” which is how the stock market pays dividends: over the long run. We also make financial plans that are based on specific financial goals—financial security for retirement, education for ourselves and our children to secure our economic futures, and the ability to reinvest in our communities and causes we care about.
The best thing about a good retirement plan? Once it’s done, it’s on autopilot. Life’s surprises will keep piling up—maybe you’ll discover a new career at 64, or you’ll meet the love of your life at 72—but what will also be piling up are your financial returns and retirement nest egg.
So go ahead and find that gorgeous rocking chair to put on your front porch—or, hey, maybe a Jet Ski! And enjoy.
Stacy Morrison is a journalist, editor and consultant, advising early-stage businesses on brand, content and business strategy. She is an award-winning editor, and the author of the bestselling memoir “Falling Apart in One Piece: One Optimist’s Journey through the Hell of Divorce.”
Illustration by Jack Hudson.
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