A recent study by the National Institute on Retirement Security (NIRS) found that on average, retired women had 83% of the median household income as men the same age. We often talk about maxing out 401(k) contributions and having a solid retirement plan for everyone, however, the fact is that women should be saving for retirement differently than men.

On average, women have lower lifetime earnings than men and receive less benefits from social security. Often this is due to the gender pay gap and the fact that many women take breaks from working to take care of children of family members. When considering that women generally have a longer lifespan than men, this can present a bigger challenge when saving for retirement. 

How can women make sure they have enough saved?

One thing women can do to boost retirement income is to wait until reaching age 70 to collect the maximum Social Security benefit. Everyone can receive benefits at 62, but you only receive a fraction of the full benefit by collecting before full retirement age. For every year you delay receiving benefits from retirement age (67) until age 70, your benefit increases by 8 percent. This can be a substantial amount in terms of the income social security provides.

Women automatically receive what’s known as the spousal Social Security benefit if her partner makes significantly more. The maximum spousal benefit is equal to 50% of the other spouse’s benefit. However, this amount is also reduced if you take the income before full retirement age.

The bottom line: Wait until 70 and you’ll have more retirement income.

It may also be a good idea for women to save more, earlier in life. This is sometimes referred to as “front-loading” retirement contributions during the 20’s and 30’s. This can help offset any time taken off to be a caregiver. Women may also want to consider a Roth IRA, which is contributed after taxes. This means that when the money is withdrawn, there are no taxes to be paid. Less taxes later in life means more retirement income.

Plan ahead!

For women, saving for retirement can be harder when lower earnings impact retirement savings. For most women it is vital to start saving as much and as early as possible to ensure there is enough retirement income to achieve retirement goals.

If you have questions about saving for retirement, Blue Waters Financial Group can help keep you on track for your financial future. To schedule your no-obligation meeting and discuss your retirement income plan, just click on the link below or call us today at 704-790-2583 (BLUE).