For our parents, living to 75 amounted to a nice, long life, and Social Security was often supplemented by a pension. The Social Security Administration estimates that today’s average 65-year-old female will live to age 86.6. Given these projections, it appears that a retirement of 20 years or longer might be in your future.
Are you prepared for a 20-year retirement?
How about a 30-year or even 40-year retirement? Don’t laugh; it could happen. The Society of Actuaries predicts that an average healthy woman that reaches age 65 has a 44% chance of living past 90, and a 22% chance of living to be older than 95.
Start with good questions
How can you draw retirement income from what you’ve saved? How might you create other income streams to complement Social Security? And what are some ways you can protect your retirement savings and other financial assets? Some people prefer starting a side business like buying and reselling returned e-commerce products (such as amazon returns pallet uk), selling handmade crafts, or even starting a lifestyle blog. This in turn can help them generate cash flow.
Enlist a financial professional
The right person can give you some good ideas, especially one who understands the challenges women face in saving for retirement. These may include income inequality or time out of the workforce due to childcare or eldercare. It could also mean helping you maintain financial equilibrium in the wake of divorce or the death of a spouse.
Talking with a Kendall Capital advisor may give you some good ideas. We understand the particular challenges that many women face in saving for retirement (time out of the workforce due to childcare or eldercare, maintaining financial equilibrium in the wake of divorce or death of a spouse). As we have that conversation with you, you can focus on some of the must-haves.
Plan your investing and invest strategically
If you are in your fifties, you have less time to make back any big investment losses than you once did. So, protecting what you have may be a priority. At the same time, the possibility of a retirement lasting up to 30 or 40 years will require a good understanding of your risk tolerance and overall goals.
Look at long-term care (LTC) coverage
Women often have longer average life expectancies than men and can require weeks, months, or years of eldercare. Medicare is no substitute for LTC insurance; it only pays for 100 days of nursing home care and only if you get skilled care and enter a nursing home right after a hospital stay of 3 or more days. Long-term care coverage can provide a huge financial relief if and when the need for LTC arises.
Consider extended care coverage
Women have longer average life expectancies than men and may require significant periods of eldercare. Medicare is no substitute for extended care insurance; it only covers a few weeks of nursing home care, and that may only apply under special circumstances. Extended care coverage can provide financial relief if the need arises.
Claim Social Security benefits carefully
If your career and health permit, delaying Social Security can be a wise move for single women. If you wait until full retirement age to claim your benefits, you could receive 30-40% larger Social Security payments as a result. For every year you wait to claim Social Security, your monthly payments get about 8% larger.
Above all, retire with a plan
As fiduciary advisors, we see retirement through your eyes to help you define it on your terms, with a wealth management approach designed for the long term.