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Retirement planning for women is more challenging

On average, women live longer and earn less, which can threaten their financial security.

For the first time, our nation’s vice president is a woman and more than 25% of the members of Congress are women.

But women still earn only 81 cents for every dollar a man earns when performing the same job. And women spend less time in the workforce due to caregiving responsibilities (for children and elders). The result: Women accumulate less for retirement than men, qualify for pensions only half as often as men, and receive lower Social Security benefits than men.

Yet women live, on average, five years longer than men and thus spend $200,000 more on health care. This makes retirement planning for women far more challenging, and your financial plan should address all these issues.

5 ways women can safeguard their financial future

Cash reserves. Every household should have three to 12 months of essential spending in cash reserves.

Long-term care insurance. More than half (58%) of women 65+ will need long-term care during their lifetimes. The average cost of a nursing home is $100,000 per year – and neither health insurance nor Medicare pays for it.

Saving for retirement. You can contribute up to $19,500 a year to your 401(k) – and up to $26,000 if you’re 50+. You can also contribute up to $6,000 to an IRA ($7,000 if 50+).

Life insurance. If your spouse or partner’s death would create financial strife for you, get a policy to provide sufficient financial protection.

Social Security. Those approaching age 62 should decide when to start receiving Social Security benefits. In many cases, waiting to age 70 is best – especially if you earn much more money than your spouse.

Financial planning is a women’s issue because women earn less, accumulate less but live longer than men. Make sure the women in your life are getting the planning they need. Talk to your mom, sisters, daughters or granddaughters about ways they can be saving for retirement. If you have questions, give us a call.

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