Women control more wealth today than at any time in history. They also face unique challenges when it comes to retirement planning, and the fact that women, on average, live longer than men makes careful planning even more important.
In my experience working with households where a woman is the sole financial decision maker, women value professional advice and collaboration in retirement planning. They are confident in their ability to stick with a plan, but not overconfident in their ability to manage risk when markets act up. Here are the issues I see come up most often.
Time vs. timing
The women I work with embrace the idea that time in the market is more valuable than timing the market. Working with a financial planner has more in common with working with a personal trainer than going to a doctor. There are no overnight remedies, but a disciplined plan followed over time is the most effective strategy.
Inflation is the silent killer
The primary goal of retirement planning is not to get rich. It is to save enough and have your investments outpace inflation. Holding cash can feel comfortable, especially when markets are volatile, but holding too much over the long run erodes the purchasing power of your savings.
Social Security can get complicated
If you spent years out of the workforce raising a family or caring for a relative, your Social Security benefit may be lower than you expect. Your benefit is based on your 35 highest-earning years, so years without earnings are counted as zeros. If you are divorced and the marriage lasted at least 10 years, or if you are widowed, you may be eligible for benefits based on your former or late spouse’s record. Social Security Benefits and You explains how these benefits work.
Confronting long-term care
Because women tend to live longer, they are more likely both to be caregivers and to need care themselves. A private room in a nursing home now costs around $10,800 a month on average nationally. Planning for this potential cost, and how it would affect your retirement, is critical. For many women it may be the largest risk to their retirement savings.
Aligning your values with your investments
Interest in sustainable investing continues to grow, and there are many ways to build a portfolio that focuses on environmental, social, and governance (ESG) concerns. That is good news for anyone who wants their investments to reflect their values. See The Greening of Wall Street.
A smarter way to be charitable
Since the 2017 Tax Cuts and Jobs Act nearly doubled the standard deduction, fewer people itemize, which made it harder to get a tax benefit from charitable giving. There are still good strategies. You can bunch several years of gifts into one year, often through a donor-advised fund. Starting in 2026, people who take the standard deduction can also deduct up to $1,000 of cash gifts to charity ($2,000 for married couples filing jointly). And if you are 70½ or older, a qualified charitable distribution lets you give directly from your IRA without the gift counting as taxable income.
If you are within 10 years of retirement, now is a good time to get organized and assemble a team of professionals you trust. If you have questions about any of the above or would like to talk about how I can help, please reach out for a complimentary consultation.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
