How Much Do I Need? Considerations for Women Saving for Retirement

From living longer to being financially responsible for aging parents, women face some unique challenges in their later years. It’s these dynamics that make saving for retirement all the more critical. The key is to take charge of your financial future now and take it one step at a time.

The first milestone on the path to a solid retirement plan is determining how much money you’ll really need. To help you begin to formulate your estimate, we’ll walk you through potential considerations and show you how to calculate it all.

1. Consider your goals and expectations. The first thing to acknowledge when you’re figuring out how much you’ll need to retire is that there’s no magical number that works for everyone. We’re all different based on our individual goals and expectations for how we’ll want to live. Do you want to live modestly and enjoy a low-key retirement? Or do you see yourself traveling, shopping and living more lavishly?
2. Consider your age and projected lifespan. Determining how long you’ll need to save for isn’t an exact science. But we do know that a retiring 65-year-old woman will likely live another two decades—approximately two years longer than a man retiring at the same age.
3. Consider your potential expenses. One financial bright spot for retirees? Their overall cost of living and expenses generally decrease. For example, taxes tend to be much lower, and work-related costs like clothing and transportation diminish significantly. Paying off your mortgage before you reach retirement age can make a big difference as well. However, you may encounter other expenses that you’ll need to factor into your potential retirement costs, such as medical expenses or the cost of caring for aging parents.
4. Consider other possible income sources. Your retirement savings, including investments like an individual retirement account (IRA) or 401(k), may not be your only source of income when you retire. Be sure to factor in other sources, such as rental properties and Social Security benefits. You may be eligible to draw Social Security for yourself as well as survivor benefits as a widow—even as a divorced widow if you were married at least 10 years.

These are just a few of the factors you’ll want to keep in mind as you take the first steps toward planning for your retirement. A financial advisor can help you dig deeper into the details, including creating a personalized plan with concrete goals and taking other factors like inflation into account. To learn more about the unique challenges women face in preparing for retirement—and the steps you should be taking to secure your financial future—download the “Woman With a Plan” ebook.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Sweet Financial and not necessarily those of Raymond James. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.