The possibility of increased tax and healthcare expenses in retirement has caused many individuals to alter their retirement plans. This is especially important for female clients because they tend to live longer and therefore need more money in retirement.
Women bear a larger burden
Women who are approaching retirement have more reason to worry about preserving their wealth than men because they may need it to live on for a longer period. Studies show that women will be in retirement for an average of 20 years, which means they’ll need to provide for about two more years of retirement and health expenses than men. This could be an average expense of $79,000 according to HealthView Services.
In addition to living longer, women are also likely to take time off during their careers to be a caregiver to children or aging parents. This impacts their Social Security benefits, making it about 23% less than men. If you also factor in the affects of pay inequality to this equation, financial planning for retirement is very important for women.
Annuities provide a solution
Annuities allow individuals to mitigate concerns about retirement by providing consistent income. Financial professionals should conduct reviews for their female clients that examine their current life insurance holdings. Ideally, they should have a mix of life insurance for estate planning and annuities for retirement income, or they could have a life insurance solution that could provide supplemental retirement income as well as protection during working years. Either of these solutions allow clients to leave money to beneficiaries while still living a comfortable lifestyle after leaving the workforce.
Editor’s Note: This post was originally published in October 2015 and has been reviewed and updated.