Saving for retirement is difficult for everyone, but it seems women in retirement have it especially hard. According to a recent report released by Massachusetts company HealthView Services, they need to save 20% more than men do in order to cover medical expenses they’ll encounter after they leave work. This isn’t the only problem females face in their golden years, either. A number of obstacles make their saving for retirement problematic.
The Reason for Increased Medical Expenses
Why do women have to pay more for medical expenses in their retirement? The simple fact is, women live longer than men on average. A woman of 65 has a life expectancy of about 89 years, compared with 87 for a man of the same age.
This may seem like a small difference, but it works out to an extra $35,000 in health care premiums. Women’s out of pocket costs will be higher as well, in addition to other expenses that aren’t factored in, such as dental care, vision and hearing. This brings the total medical costs post-retirement up to $306,000 for women on average, as opposed to $260,000 for men.
To deal with this disparity, it’s recommended that women funnel about 20% more into their retirement accounts than men do. It’s particularly critical during their final years at their job to make sure they have enough to cover expenses. It seems unfair, but it’s the only way for them to ensure their future.
Female Retirement Statistics
Unfortunately, it seems females are lagging behind when it comes to retirement saving. According to the Transamerica Center for Retirement Studies, the average man currently has about $115,000 in retirement savings, compared with only $34,000 for women.
There are many issues that can come into play in this disparity. Women, on average, earn less than men. They are more likely than men to be the head of a household that includes children, with the rocketing costs that involves. Women also have to take more time away from work, whether to have children or, often later in life, to look after an ailing family member.
What to Do
It’s clear even though women will need more money for retirement in the long run, they have less saved up on average. This means that their financial troubles will ultimately be greater than for men. Their funds will be depleted sooner and their hardships will last longer. If you’re a woman saving for retirement, what can you do to remedy this? There are a few steps you can take.
First of all, it’s important to delay collecting Social Security. You’re eligible to start receiving benefits at 62, but your checks will be significantly reduced. If you can, wait until 66 when you can receive the full amount. (For those born after 1960, that age will be 67.)
For married women whose spouses have an annuity or a pension, it’s also possible to arrange a survivor benefit, which can supplement your income. By taking a slightly lower monthly payment, they can ensure “joint life” benefits, wherein you continue to receive checks, even after your spouse passes away.
It’s also important to make sure both you and your spouse have life insurance. In addition to helping cover their final expenses, which could otherwise take a large chunk out of your savings, it can provide extra money to cover debts, medical costs and more.
The extra money that women need in their retirement years can be a significant challenge. However, knowing about it in advance gives you the tools to do something about it. With a little pre-planning, you can make sure your nest egg is sufficient to cover all expenses in your golden years and help you live a comfortable life for a long time to come.