Retirement Planning for Women

Female Life Expectancy: A Factor in Retirement Planning

It isn’t exactly news that women typically live longer than men. According to recent research from the CDC, the average 50-year-old female can expect to live to age 81.9, higher than the average 50-year-old male at age 78. At age 65, women can expect to live, on average, an additional 16.9 years. And these are just averages, meaning many women will likely live well into their 90s and beyond.

Outliving assets in retirement is one of the worst risks people may face, so it’s wise to plan for a longer-than-expected life. In addition, there’s a good chance a woman will outlive her spouse and become solely responsible for her own health care and household expenses. That’s why it’s important to plan now, save early and understand investments.

Start Retirement Planning Now

When it comes to retirement planning, time is your best friend. The earlier you can start saving—and investing—the better off you’ll likely be. If you can earn consistent market-like returns on your retirement savings, even a small retirement contribution of a few thousand dollars a year can grow into a big nest egg over the long term.

It’s important to estimate how much income you'll need to fund your retirement. Calculate your current expenses, but remember that your expenses may change by the time you retire. Work-based retirement plans often provide helpful tools to estimate your income. Ultimately, if you’ve put off setting aside funds or investing for retirement until now, remember it's not too late. The most important thing is to begin saving and investing as soon as possible.

It’s important to estimate how much income you'll need to fund your retirement. Calculate your current expenses, but remember that your expenses may change by the time you retire. Work-based retirement plans often provide helpful tools to estimate your income. Ultimately, if you’ve put off setting aside funds or investing for retirement until now, remember it's not too late, the most important thing is to begin saving and investing as soon as possible.

Understand Your Retirement Planning Investments

Many long-term investors need equity-like growth to sustain their lifestyle in retirement. So radically reducing stock exposure as retirement approaches can potentially make funding retirement much more difficult. You risk missing out on the investment growth you may need to retain your preferred retirement lifestyle by electing to hold only a small percentage of your savings in stocks near or after retirement, especially if you could potentially live for 20 to 30 years in retirement. That’s why it’s so important to understand your investments and the roles they play in your portfolio. Know what you own, and why, and make sure your investment portfolio stands a good chance of earning the returns you need to reach your goals. A simple compound growth calculator—available free online—can help you estimate this.

Don't Neglect Your Investing Basics 

If you're unfamiliar with common investment concepts such as diversification, asset allocation, and compounding, you can expand your knowledge and confidence with a little bit of research. A simple web search can reveal hundreds of free educational articles and videos on the topics of investing. 

You can find jargon-free introductions on websites like Investopedia. Books like The Wall Street Journal’s Guide to Understanding Money and Investing are another great resource.

Finally, Fisher Investments founder, Ken Fisher, has written some great books on this subject, like Plan Your Prosperity and The Only Three Questions That Count. And remember, you don't have to do it by yourself—a trusted investment adviser can work with you to set retirement goals and help you plan for long-term financial success.