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Retirement Planning For Women

Tips on retirement planning for the ladies

Retirement Planning is important for both men and women, but even more so to a woman.  Why?  On average, women live longer than men, and therefore they also need to fund a longer retirement period.   Studies have shown that a woman retiring at the age of 65 can expect to outlive her husband by anywhere between 5 to 15 years!  Most often than not, women are funding these longer periods with less working years, as time off is taken for child rearing and acting as the caregiver for family members, as well as layoffs.  Women are also more likely to take on employment that does not provide a pension.   This also is compounded by the fact that even with the strides obtained by feminists, women are still paid less than men.  It therefore means that fewer funds are available for retirement savings.


Even if a woman is covered by her spouse's pension plan, 80%-90% of all women will be responsible for their own finances for at least part of their lives. It's also true that most women who were financially fine while married live in poverty once widowed, as usually their husband took care of the financial planning and therefore, they are either unable to carry on or have no idea what is happening.   Females therefore need to recognize that retirement planning for women is for ALL women, not just for single women.


Women who are married usually believe that even if they have no pension of their own, they can rely on their husband’s pension, but they are so wrong.  Think about it. A couple is living on the husband’s pension, and the woman dies.   In this scenario the husband suffers no financial loss and though grief stricken, financially life goes on much the same for him, as he continues to collect his full pension.   Let’s look at the other side of the coin.  The husband dies first, and this is usually what occurs.  His wife will probably get a 50% survivor benefit, which won’t come close to providing the income she needs to carry on with the same life style.  Alternatively, she could receive as his beneficiary, a pension depending on the number of years remaining on the option chosen.   What she will receive and for how long is not within her control.  Unlike her husband, his death affects her financially so unless she has another source of income when this occurs, she runs the risks of entering into or close to poverty.


There is no reason why a woman cannot plan for her retirement on her own, even if she is married.   She can create a road map for her retirement and then can then be incorporated into a plan for the couple.  It would ensure that should she live longer than her husband that additional period is taken care of in the plan.  It is not a task for one partner, but for both and women need to recognize that they too have a responsibility for their own future, their retirement future.


Many a time, women postpone retirement planning because they feel daunted by the sheer magnitude of the task.  There is no need to feel overwhelmed, once this task is started you will realize that it is not really as hard to complete as you initially thought.   The activities involved in retirement planning for women are about the same as for men retirement planning.  You have to think about your future and what you want to accomplish when you are ready to stop working and start enjoying life a little more. You need to think about this because you need to think about the amount of money that you rely on to get you where you want to be when retirement arrives, whether it is a few years away or twenty years down the road. You have to start planning so that you are ready and prepared with no worries for when the day finally comes.

You should seek help from the various professional advisers, such as a retirement consultant, financial planner or investment advisor, so that you are ready and able to retire when the time comes. These individuals will be able to assist you in figuring out how much money you are going to need to have for retirement and how to invest your money properly so that you are secure.   Every woman needs to know that they are secure and have taken the right steps to prepare themselves, as well as their family, for what lies ahead down the road.  

Whether you are married or not, here are a few steps to guide you as you take on this challenging task:


Make retirement plans a priority when you consider accepting a job offer

Make a good retirement plan one of the major benefits that helps you to decide on whether or not you take a job. Look for employers who will match part or all of your saving in a contributory plan, whether it is a pension fund or retirement scheme.   Sacrificing some of your current salary now to achieve your retirement goal in the future will be well worth it.



Work as long as you can at the highest salary you can

Work for as long as you can, and in particular ensure that you work as long as you can at the highest salary that you can achieve.    The older you are when you retire is the fewer years you will have to fund.  The higher your salary is the more you have set aside in your retirement fund to which compound interest will apply.  The same will apply to your National Insurance Scheme (NIS) and National Housing Trust benefits.

Make sure you stay at a job long enough to earn retirement benefits

Each employer will have different periods for vesting i.e. the time period in which you will have to work at that company to be able to access a pension.  Most companies are now at 5 years; you will need to ensure that you obtain this information on employment, as it can vary.  Too often employees, especially women, quit work, transfer to another job, or interrupt their work lives just short of the time required to become vested.

Taking responsibility for your own pension on retirement

If you are not employed or can access a company pension fund, you can take on the responsibility for your own retirement benefit fund by saving in a retirement scheme, which will provide you with a pension on retirement. 

Understand the effect on NIS benefits of divorce and remarriage

If you divorce, you are not entitled to a widower payment based on your ex husband’s NIS payment.   If you are receiving a widower’s pension and remarry or enter into a common law relationship this will cease, with receipt of one year’s lump sum payment from the date of the marriage/new relationship.  Even though you lose this right under these circumstances, you'll be entitled to collect payments based on your new husband's or common law partner’s benefits.   Make sure you are aware of the state benefits that are applicable to you and the conditions attached to them for payment to be made.

Put money away for retirement on a regular basis

It does not matter if this was not a priority before, start today and start now.   Use the 10% of your salary rule or less if you cannot afford to save as much as 10%.  The important thing is to begin saving so you can build a nest egg for the future.  Begin to treat this as another one of your family expenses, which must be dealt with as any other on the list.  At the end of the day your family will also benefit from you having taken this approach.

Learn about your finances

Begin to pay attention to financial matters that affect you and your family.  Make sure you understand them and can manage the activities associated with them.  Get your professional advisors to explain anything you do not understand.

Identify your financial assets and debts and begin to save for your future by paying down debt and budgeting.

If you are married, be sure that you and your husband each understand what you own and what you owe, and use insurance to plan for the possibility of death or disability.  These will all play a role in completing your retirement financial plan.

It’s up to you; you no longer have an excuse not to take charge of your retirement planning. Start Now!!

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