We all know men and women are different in some fundamental ways.
But is this true when it comes to financial planning? In a word, yes.
Everyone wants financial security. But women often face unique obstacles that can affect their ability to achieve it. Let's look at some of these potential headwinds.
Some key differences On the path to financial security, it's important for women to understand what they might be up against, financially speaking: Women have longer life expectancies. Women live approximately 5 years longer than men.1 A longer life expectancy presents several financial challenges for women:
Women will need to stretch their retirement dollars further
Women are more likely to need some type of long-term care, and may have to face some of their health-care needs alone
Married women are likely to outlive their husbands, which means they could have ultimate responsibility for disposition of the marital estate
Women generally earn less and have fewer savings. According to the Bureau of Labor Statistics, within most occupational categories, women who work full-time, year-round, earn only 82% (on average) of what men earn.2 This wage gap can significantly impact women's overall savings, Social Security retirement benefits, and pensions. The dilemma is that while women generally earn less than men, they need those dollars to last longer due to a longer life expectancy. With smaller financial cushions, women are more vulnerable to unexpected economic obstacles, such as a job loss, divorce, or single parenthood.
Women are more likely to be caregivers. Statistics show that the majority of caregivers are women. Of the more than 50 million Americans serving as caregivers to their loved ones, 61% are women.3 Often times being a caregiver means having to work part time or leave the workforce. Over time, being a caregiver can have significant financial implications, such as:
Loss of income, employer-provided health insurance, retirement benefits, and other employee benefits
Potentially lower Social Security retirement benefits
Difficulty with career advancement or reentering the workforce
Increased financial vulnerability in the event of divorce or death of a spouse