By Libby Kane for LearnVest.com
Read more about why retirement planning is harder for women on LearnVest.com.
There are a lot of ways that men and women differ, but we bet there’s one you might not guess right off the bat.
Yes, retirement. According to a January 2012 study by Ameriprise Financial, more men than women have determined how much money they’ll need to retire, have set aside money in their investments for retirement and feel confident that they’ll reach their goals.
In fact, a 2010 study found that 92% of women don’t feel educated enough to reach their retirement savings goals, but that 56% of them want to be.
Luckily, financial education is our specialty.
We spoke with Stephany Kirkpatrick CFP®, AIF®, LearnVest Financial Planner in Residence and former Director of Retirement Planning at Pension Architects to figure out why women have such a hard time with retirement saving … and how you can get on track.
It’s in the Numbers
Women face some challenges that are purely logistical, like the simple fact that they live longer than men. Today, the average American white male can expect to live 76.2 years, whereas the average American white female can look forward to 80.9 years.
So, if a man and a woman both retire at age 67 (the traditional retirement age of 65 is quickly becoming outdated), a man needs to support himself for a little over nine years; a woman, nearly 14. Let’s say our hypothetical man and woman each earned $70,000 per year when working. Keeping in mind that a person needs at least 70% of her income to support herself for each year of retirement, the woman needs at least $280,000 more than the man to float her retirement.
Plus, Stephany points out that many women take time out of the workforce to focus on their families—or opt not to work at all—which means they’re automatically operating at a loss when it comes to money earned. It’s likely that their retirement accounts will reflect this.