5 Reasons why women must save for retirement

by - August 16, 2016

Saving for retirement is challenging—but studies show it’s actually tougher for women, who all too often find themselves living in poverty during retirement. Females face unique challenges in terms of saving for retirement: they might be home care-givers and not have their own paying jobs, they could take time off work to raise children, and they are also projected to live longer (thus more expensive) lives than males.

Alexander Forbes Financial Planning Consultants senior financial planner Mandy Porter unpacks some insights for us. Here are five reasons why women must save for retirement.

Long-lasting financial independence for women
Women are expected to live longer than men. Whether that’s good or bad, depends entirely on which side of the looking glass you’re on. Since women can expect to outlive the men in their lives, the prospect of having a lengthier retirement and outliving their assets is great. Knowing that the longevity factor does not tip in our favor, we would be wise to be proactive in our retirement planning.

Caring for the caregiver
Taking time off work to be a caregiver for their spouse, aged family member or children negatively impacts a woman’s ability to save for retirement. The need for additional financial support should therefore be part of every woman’s future retirement plan. It’s also advisable that a woman puts away enough money to see them through if they plan to take a break from their full-time career at some point. 

Lower annual retirement incomes
Women may be saving, but they are not saving enough. Misinformation can be dangerous, so be sure to speak to a financial planner if you resign, or find yourself retrenched or dismissed. They will give you the best advice on what to do with your retirement savings to keep them growing for you. Saving for your future needs is after all, your first priority if you want to retire with dignity one day. 

For better or for worse: ageing single
Research suggests that women will outlive men by up to six years. As widowhood commonly leads to loss of income, it may be an idea to take out life insurance on your spouse in the event that there is a death. Alexander Forbes can assist you with comprehensive life cover that takes your every financial need into account – including loss of income through disability, retirement, or the expense of taking care of critical illnesses. 

Greater healthcare costs
With longevity being the biggest risk facing women, they need to maintain healthier lifestyle habits, such as a proper diet, regular exercise and preventative care. However, health challenges are part and parcel of life – and one should always be able to afford good medical care in case of need.

As a woman, saving, especially for retirement, should start early and continue throughout your lifetime.

The above reasons can place women at a disadvantage when it comes to having enough money for retirement. The solution is for women to simply save more. Trying to save more money when you earn less than your male co-workers can be difficult, but it's not impossible. It's what you do with that money that matters. Planning ahead is the key for women.  If you’re having trouble starting to save for retirement and aren’t sure what to do, consulting a financial planner may be the best option.

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