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  • Women’s Financial Risks during Retirement

    Women face a unique set of financial challenges when saving for retirement. The gender pay gap, being the primary caregiver, and the salaries of many traditional “female careers” can be some of the biggest. Then there are the financial risks during retirement.

    We like the way this infographic points out those that are most significant. But it also begs the question, what can a woman do to overcome these risks, whether you’re already retired or still working and saving? First is simply acknowledging the realities of your situation and ensuring that your financial planner is tuned into them as well. Financial planning is not one size fits all. Your circumstances, both as a woman and as an individual, need to be taken into account.

    Then as you think about these risks, discuss them with your financial planner if you have any concerns. You may want to share this infographic as starting point for the conversation.

    financial risks women face

    If you’re still working, you may also find the insights from this recent article, Some Women Attain an Enviable Status: 401(k) Millionaire, helpful.

    The key takeaways from women, all of whom were earning less than $150,000, include:

    • Contrary to stereotypes that women are more risk-averse, women who achieved millionaire status — and who earned less than $150,000 — are investing in stocks in a similar fashion to men: They held about 77 percent of their savings in stocks, on average, versus 76 percent held by their male counterparts. So they have clearly been helped by the growth in the stock market.
    • Both men and women tend to cross the 401(k) millionaire threshold after they hit 50, though women take a slight lead: The average age is 58.5 for women, 59.3 for men.
    • Women who earn less than $150,000 and have attained 401(k) millionaire status are saving 18.1 percent of their salaries, on average. That amount is complemented by a 6.8 percent employer contribution, for a total of 24.9 percent, or roughly twice as much as women overall. Men, meanwhile, save 22.8 percent total, including the employer match.

    Saving for retirement when you’re a woman does have its challenges and risks, however many can be overcome with some planning, either on your own or with your financial planner. As Michelle Thompson, a CFP with IRC Wealth, says, “Understanding your financial circumstances combined with proactive planning are the keys to a woman’s successful retirement.”

    Everyone’s situation is different; what it takes for you to be financially independent is unique to you. If you’d like to discuss any questions or concerns you have your financial life, please contact us for a no obligation consultation to see how we can help.



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    Women’s Financial Risks during Retirement

    by Michelle Thompson time to read: 2 min