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The most common mistakes women make when planning for retirement

December 23rd, 2014 by

5 grown-up challenges to tackle head on - starting NOW


How strong is your retirement game? If new research is any indication, it could likely use some work. 

According to findings from the 2014 Aegon Retirement Readiness Survey that polled 16,000 employees worldwide, only 20 percent of female respondents felt they were on track to achieving their required retirement income. Forget the palm trees and the sandy beaches - we’re talking base requirements here.

Another 40 percent said they didn’t know if they were on track or not - which is almost more worrisome a thought.

Interestingly, and perhaps a bit surprisingly, these coincided with findings that 71 percent of female respondents felt financially confident and 80 percent were actively involved in managing their household finances.

The study concluded that many of the women ticking off the “unprepared” or “unsure” boxes tended to concentrate on short-term finances - ultimately giving low priority to their long-term goals.

Grown-up challenges

This isn’t the only challenge women face when looking at retirement. A quarter of female respondents associated retirement with “insecurity” and another fifth did so with “poverty”. It’s no wonder, considering a U.S. study recently found older women are twice as likely as older men to live in poverty. Indeed, women face a slew of growing concerns when it comes to planning for their retirements. 

With this in mind, we looked to several bodies of research and expert opinions and came up with the top five worst mistakes women make when preparing for retirement.  Knowing them helps to conquer them...

5 mistakes women make when preparing for retirement

  • Failing to prepare for a very long longevity

Women live longer and often earn less on the dollar than their male counterparts throughout their lifetime. That means you have more time to account for (about seven years, on average) and less time to do it. It’s crucial that you start planning for those extra years of life today.

  • Neglecting to think about all the “what-ifs”

What happens if your spouse passes away before you? What happens if you aren’t able to retire by the time you expected (the average of which is 62 among women, if you were wondering) but your health is waiting for you to play financial catch-up? You may be an optimist at heart, but it’s important to consider all the factors that could affect your finances should they go a little differently than you had imagined.

  • Putting everyone else’s expenses first

With 75 percent of respondents in a U.S. survey realizing that they have only $30,000 in their savings account as retirement nears closer, the need to start prioritizing our retirement funds has never been more pronounced. You may be used to putting the needs of everyone else in the family tree over your own, but there’s no reason you can’t do it all. With a little preparation, you can be the generous donor behind your child’s college tuition - and yes, even your very own little retirement nest egg.

  • Being too afraid to invest

If this is you, don’t worry - this might actually be a good thing. One Berkeley study found women, on average, performed better in the market than their male counterparts - largely due to their conservative nature. Men tended to switch through investments more frequently, resulting in greater fees and overall smaller returns. 

  • Being even more afraid to seek advice

If this is you - worry! Women may be more open to asking for help, but they’re less likely to seek help from an advisor if they don’t feel that advisor is meeting their needs. Women are expected to inherit 70 percent of all wealth over the next two generations - but money won’t be the only thing changing hands. If you’re not getting what you need from your current advisor, don’t be afraid to expand your horizons - and find the right one for you.

Time for change

Today’s the day to start making change (figuratively and literally). Plan for the best, prepare for the worst, prioritize your goals, power up your portfolio, and pick a winning advisor to bring it all home. The sooner you start, the better. 

The early bird always gets the wealth.

Jul 26 2017 1:38pm

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