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Women statistically outlive men by about 6 years, and a financial planner says 4 strategies can help them afford it

  • Women tend to live about between six and eight years longer than men on average, according to the World Health Organization. And that means they need to have more saved for retirement.
  • However, many women lag behind in retirement savings. In one study, when compared to male counterparts, women had less than half the amount saved for retirement.
  • Financial planner and Ameriprise private wealth adviser Michelle Young says that there are four strategies women should use to make up for this gap: consider saving more, keep a balanced portfolio, have appropriate insurance, and work longer. 

Statistically speaking, women live between six and eight years longer than men, according to the World Health Organization.

Despite this, women tend to lag behind men in retirement savings. A study conducted by the Transamerica Center in November 2018 asked over 5,000 people saving for retirement how much they had saved. While men reported a median of $76,000 saved, women reported a median retirement savings balance of just $23,000. 

Women have traditionally faced a wide gender pay gap in their working years. In retirement, they’ll face a savings gap, exacerbating issues like covering basic expenses like healthcare and housing.

“These extra years translate into higher living expenses, and the possibility of higher medical and long-term care expenses,” says Michelle Young, a financial planner and Ameriprise private wealth adviser based in Edina, Minnesota. 

“There are generally four strategies you can use to address the possibility of a longer life span,” Young tells Business Insider. “Save more, have a balanced portfolio mix, consider if insurance can help protect you in case of a disability or long-term care need, and consider working past typical retirement age.”  

1. Saving more is the safest bet

For many women, the obvious solution is to save more. 

For healthcare alone, Young uses a placeholder for her clients’ planning of $450 per month per person after age 65 to cover expenses that Medicare doesn’t cover, such as supplement plans and even dental and vision services. For an extra five years, that cost alone totals $27,000 — a figure $4,000 higher than what the Transamerica Center study found the typical women had saved for retirement overall.

A study by The New School’s think tank, SCEPA, found that about 40% of seniors will face downward social mobility due to a loss of income in retirement, and that the only prevention is saving more. For women, living longer requires saving more. 

2. Keeping a balanced portfolio mix is essential

For anyone wanting to retire, Young says that keeping your portfolio appropriately balanced between stocks, bonds, and cash is essential.

For women who need to make their assets last, it’s even more important. Making sure that women going into retirement have the right asset allocation is critical. Most financial advisers recommend reducing risk in your investment portfolio as you approach retirement age, to keep more liquid assets to draw from in your post-work years.

“Consider speaking with a financial adviser who can provide you with a comprehensive retirement plan,” Young suggests.

3. If you can, work longer 

It’s important to note that working longer isn’t a substitution for saving. Rather, the goal behind working longer should be to prolong retirement savings and increase Social Security benefits. 

“If you keep working, you could choose to delay your Social Security benefits,” Young says, adding that you can delay benefits up until age 70. “Doing so boosts the amount of your monthly Social Security check once you start taking benefits,” Young says. “This can help you create steady long-term income in retirement.”

But she also reminds working women that working longer doesn’t always have to mean continuing the nine-to-five job well into your golden years.

“Your extended work life could be consulting, leveraging past experience to start a small business, or simply going part-time in your current role,” says Young. “Whatever working more looks like for you, the extra income — whether for months or several years — gives you the opportunity to save more without tapping into your retirement savings yet.”

4. Take advantage of workplace benefits

And while you’re working, take advantage of any benefits your employer might offer.

“Women should also make the most of their workplace benefits while they are employed,” says Young. She suggests that women enroll in any available insurance coverage, including health insurance, life insurance, and disability insurance. In most cases, coverage provided by an employer expires along with your tenure, so anyone wanting insurance coverage for the long term should consider policies offered by independent insurers that will still be in effect after you retire.

Plus, it’s a good idea to put policies in place for the future while you’re working — for instance, long-term care insurance. Services like nursing homes and in-home care aren’t covered by Medicare, and can be incredibly costly. Having the right type of long-term care insurance could help retirees afford those necessary expenses later in life if needed.

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