Bruce Helmer and Peg Webb
As women continue to take increasingly active financial roles — whether in families, relationships, at work, or on their own — they are also confronting a retirement landscape full of both opportunity and challenge.
Despite controlling a growing share of personal wealth in the U.S., many women still feel unprepared for retirement. But with the right strategies, education, and support, a woman should feel empowered to shape your financial future and retire with confidence.
Mastering math over myth
The retirement journey is often more complex for women, despite much progress that’s been made over the past five decades. The reasons are multifaceted:
• Longevity risk: On average, American women live nearly six years longer than men. This benefit comes with a price. When starting with similar assets and investment strategies, a woman’s chances of outliving her retirement savings are more than double that of a man — 12.6% versus 5%. Those extra years can add up to a significant financial burden if not adequately planned for.
• Earnings disparity: Women working full-time, year-round earn just 83.7 cents for every dollar earned by men. This persistent gender wage gap not only means fewer dollars to save throughout a career but also contributes to a 20% reduction in average Social Security benefits compared with men.
• Career interruptions and part-time work: Many women take breaks from the workforce to care for children or aging parents. These interruptions affect their ability to contribute consistently to employer-sponsored retirement plans. In fact, women are more likely than men to work part-time, often without access to 401(k)s or similar retirement savings vehicles. When they do have access, lower earnings can lead to smaller employer matching contributions.
• Financial confidence: Studies show that women tend to be less confident than men when making long-term financial decisions. This can lead to overly cautious investment choices and missed opportunities for growth. However, there is a silver lining: Women often outperform men in investing by a modest but meaningful margin — about 0.40% per year — due to a more disciplined and risk-aware approach.
Your personal roadmap to a stronger financial future
Fortunately, these challenges can be met with smart planning and tailored strategies that speak directly to women’s financial realities.
• 1. Budget with purpose: Start by understanding your current expenses and estimating your future needs. Lay the groundwork by identifying your long-term goals and factoring in your family situation. Set a realistic savings rate — either as a percentage of income or a fixed dollar amount — and commit to it consistently.
• 2. Embrace strategic asset allocation: Diversifying your investments is key to balancing risk and reward. While many women are naturally risk-averse, it’s important not to avoid risk entirely. Instead, be strategic. Spread investments across asset classes, industries and geographies. Incorporate cost-effective hedging strategies to protect against market downturns. A well-diversified portfolio can help ensure a reliable stream of retirement income and guard against unexpected life events such as inflation, career breaks, or divorce.
• 3. Optimize for taxes: Take advantage of tax-deferred retirement accounts like Traditional IRAs and 401(k)s, which allow your investments to grow without immediate tax implications. Roth IRAs and Roth 401(k)s, while funded with after-tax dollars, offer tax-free withdrawals in retirement — ideal for long-term growth. Taxable investment accounts can offer liquidity and flexibility, and strategies like tax-loss harvesting can minimize tax liabilities over time.
• 4. Maximize Social Security benefits: When and how you claim Social Security can significantly impact your retirement income. Claiming benefits before full retirement age (FRA) leads to permanent reductions, while delaying until age 70 yields the maximum benefit. If you’re married, coordinating spousal benefits is another critical strategy. Because Social Security is adjusted for inflation, it serves as a valuable financial cushion over a long retirement.
• 5. Commit to continual learning: Empowerment comes with education. Take advantage of financial education resources tailored to women. Wealth Enhancement Group offers a free, on-demand webinar titled Retirement Planning for Women: 6 Critical Steps to a Confident Future. This session covers essential strategies for building financial confidence and security. You can find this webinar and more on the Insights section at wealthenhancement.com.
Finally, try to attend women-focused events to connect with other women navigating similar challenges. Speak with a qualified financial adviser who understands your unique needs. The more you learn, the more confident you’ll feel taking control of your financial destiny.
You’ve already made great strides in your education, career, and leadership. Now it’s time to translate that progress into lasting financial security for yourself. By drawing on your resolve and resources, you can redefine what retirement looks like — not just for yourself, but for generations of women who will follow in your footsteps.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830 AM on Sunday mornings. Email Bruce and Peg at yourmoney@wealthenhancement.com. Securities offered through LPL Financial, member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment advisor. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.
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