**Top** 10 Common Challenges Women Face in Retirement - Simple Money Tips for Women (2024)

26 Dec 10 Common Challenges Women Face in Retirement

10 Common Challenges Women Face in Retirement

Whether you realize it or not, women often face different challenges than men do when it comes to retirement. And nobody wants to make a retirement mistake because it usually ends up costing you big in the long run. Check out our blog 5 Big Retirement Mistakes to Avoid to help you dodge common pitfalls associated with retirement.

In this article, we will focus on the unique challenges women face in retirement and how they can tackle them head-on.

#1 Longevity

Since women tend to live longer than men, they can often find themselves ill-prepared for retirement simply because they are outliving their retirement or savings. This is why women usually “care more” about retirement than men; they understand that their chances of living longer than their spouse means they need to have a plan that is independent of their spouse’s plan. While women need to plan for a longer retirement, they also need to not rely too much on social security benefits.

#2 Being a Caregiver

Because women are usually the caregivers for their families (taking care of children or ailing parents), their work is often sporadic and inconsistent, and they work part time jobs instead of full time. This results in lower wages and retirement benefits over time along with fewer chances at advancement. When women choose to meet their families’ needs instead of continuing to work, they end up with a lower lifetime work history, which results in lower wages and lower benefits. Unfortunately, this can set women up to live in poverty during their retirement years.

#3 Lower Lifetime Income

Women usually end up with a lower lifetime income because they take time off for children, ailing parents, and other family needs. This results in lower social security income and lower pension benefits as well. This means that even though women often live longer, they end up retiring on less income for a longer period of time. Sounds like a bad magic trick, right? But this is the sad reality that millions of women across the country find themselves living.

#4 Smaller Savings

Many women end up with less in their savings accounts because they are generally more risk-averse when it comes to investing and because they earn less overall (due to the gender pay gap or working less because they are unpaid family caregivers). Women often sacrifice for their children’s education or for their ailing parents’ needs by neglecting their own retirement needs. Since they have less money to contribute to their 401(k) [if they even have a 401(k)], they end up with less when they’re ready to retire. The truth is women need to accumulate more because they will probably live longer and need more money for healthcare.

#5 Lack of Involvement in Finances

Married women and women who divorce after retirement are usually not very involved in their retirement planning. Women often feel less knowledgeable about financial terms and best practices, and this sets them up for disaster later on.Women need to bite the bullet and get involved in their household finances and retirement planning, especially if their spouse is the one who takes care of everything. Here are some tips for talking with your husband about taking a more active role in your family finances.

#6 Impact of Going through a Divorce

Around 15% of women in their early 60s are divorced. This means that divorced women’s incomes are affected not only now but also in the future because they often don’t or can’t get retirement benefits from their ex-husbands. Technically, a pension is considered to be an asset acquired during the marriage and should be equally divided during the divorce proceedings. But many times, ignorant judges or uninformed lawyers don’t insist on settling pension and retirement benefits at the time of the divorce. Women need to be prepared and knowledgeable about their rights during a divorce.

#7 Impact of Being a Widow

Women are much more likely to become widows than men are widowers because they generally live longer. Nearly 50% of married women are widowed by age 65. This results in a husband’s benefits from his pension and social security being reduced, which means the surviving wife is living on much less income. It’s important that women have a plan, have basic financial knowledge, and understand how to manage their money if they are widowed so they don’t end up in poverty or depending on someone else to support them in their later years.

#8 Working Longer

In order for women to avoid poverty, many choose to work longer to support themselves. This is especially true of widowed and divorced women. However, this isn’t always an option, particularly if a woman has ongoing health challenges or family responsibilities that make it difficult for her to work. And even if she works part-time when she can, it’s likely that the amount of money she’s making isn’t enough to really make an impact on her quality of life. And don’t forget—social security income may be reduced if a woman earns too much. This is the inevitable “catch-22.”

#9 Healthcare

Many wives live 5-8 years longer than their husbands. While women often take care of their husbands, who takes care of them when their husbands are gone? If children are unable to care for them, then women are forced to obtain long-term caregivers for themselves. This isn’t cheap, as you can imagine. And the costs of medical care, medications, and other healthcare costs continue to climb. The costs of facilities such as nursing homes can drain a woman’s savings and retirement quickly. So healthcare costs during retirement are a real concern for women.

#10 Quality of Life

Women don’t just face insecurity during their retirements years; many times their quality of life is compromised because of all of the above reasons. They find themselves living longer on less money and are often forced to lower their quality of life. They end up making decisions like selling their home, going back to work, or skimping on real needs they have. Sadly, compared to men, women (especially minority women) are more likely to live in poverty after age 65.

The moral of this article? Women, don’t wait to plan for your retirement and don’t depend on your husband to provide it either. Take action today to safeguard yourself for your future.