Is Saving for Retirement Different for Women?

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It's true that saving for retirement is indeed different for women. But why? And in what ways can women adjust knowing these factors? To learn more, we connected with Abby Lininger, Financial Advisor with Drake Financial Group, and Laura Corbiani, CFP®, Wealth Advisor with Midwest Capital Advisors.

Retirement for women can be influenced by a number of factors. According to Corbiani, women tend to be less confident in financial matters because of things like the fear of embarrassment when asking a question, being afraid of making mistakes or telling themselves they're "bad at math." Corbiani also notes that women—who account for two-thirds of the minimum wage workforce in the U.S.—typically make less money than men while also having a longer life expectancy.

"Living longer means their money needs to last longer, and women likely need to save more and/or be more aggressive with their investments to cover the extended period of time," Corbiani said.

Lininger notes that among her clients, she sees many women who have alternative sources of income through independent consulting roles or small businesses, which often prevent them from having a traditional 401k or 403b for retirement savings.

"[Some can end up feeling] overwhelmed, not knowing what their options are or where to turn for good advice," Lininger said. "As a result, nothing gets invested and valuable years go by, putting us behind our male counterparts."

While it can feel downright awful to think about what's working against us, there are ways to take control and work toward a future that includes a comfortable retirement.

"Women make more financial decisions than they realize," Corbiani said. " If women can recognize the skills they already have and proactively address biases, this can help improve their financial skills."

She suggests taking the following steps:

Make time for your financial self. "Making time to understand your financial situation is paramount to long-term financial security. The first step is often assessing your current financial situation, and from there thinking about your financial hopes and dreams."

Express how you learn. "Do you prefer text, charts or graphs when it comes to learning new concepts? If you're meeting with a financial advisor, let them know how so they can appropriately explain any thoughts or feedback."

Use automation whenever possible. "If you have an employer plan where you can automatically increase your contributions each year by 1%, turn that feature on! Small changes can turn into a large sum of money over time."

Check in with a professional. "If you have an employer plan that has an investment advisor, consider scheduling an appointment to learn if you're invested appropriately."

Network and learn from others. "Talk to your friends, colleagues or mentors who've taken action in understanding their financial situation/retirement planning. It sometimes can be a social taboo to talk about money, but just like many other important topics for women, it's time to shine some light on subjects that are not always 'polite' to talk about."

It's not uncommon for women to feel pessimistic about their future financial situations, with many not feeling confident they'll reach a comfortable retirement. Lininger wants us to reframe that thinking entirely.

"Nine times out of 10, anxiety comes from a lack of planning," Lininger said. "Most of us were never taught how to calculate how much we'll need to retire, let alone what we need to do to get there. How are you supposed to reach a destination you don't even know exists? We put so much pressure on ourselves, especially as women. Why do we think that in addition to being an expert in our own field we should also be a financial expert? It's OK to ask for help."

And remember: It's never too late to take steps toward a secure retirement. Corbiani suggests embracing incremental progress, focusing on controllable factors, considering alternative paths and taking care of your well-being.

"There can be a lot of confusing terms with financial matters, and it's easy to avoid dealing with it because it's human to avoid things that are overwhelming," Corbiani said. "Money is one of the most important things to understand in life—the sooner you understand it, the better you'll feel. Resources are available that can meet you at the level you're at, so you can empower yourself to learn more about your situation."

To find qualified financial advisors and other resources: napfa.org | cfp.net | savvyladies.org

Written by Sarah Suydam, Managing Editor for West Michigan Woman.

This article originally appeared in the Feb/Mar '24 issue of West Michigan Woman.


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