Retirement Strategies for Women: Financial Planning After 40
By Jeff Gilbert
Financial planning for women often involves hurdles that don’t always affect men in the same way. Longer lifespans, career pauses for family, and wage disparities are just a few factors that can impact how women prepare for retirement.
If you’re in your 40s, now’s the perfect time to get serious about your retirement plan, or update the one you have. Understanding these unique challenges can help you make decisions that set you up for lasting financial stability. Let’s explore some common obstacles and share strategies to help you build a retirement plan that works for you.
Retirement for Women: Financial Planning Obstacles
Women encounter several issues in retirement that require careful financial planning for women to properly prepare for the future.
Longer Life Expectancy
The National Center for Health Statistics shows a big difference between the life expectancies of American women and men. Data from a 2022 study reports that the life expectancy of women in the U.S. averages 80.2 years—a full 5.4 years more than the average life expectancy for men. This indicates that women likely have more retirement time to plan for.
Income Gap
Despite increased efforts to attain equality, the income gap between men and women still affects financial planning for women. As of 2022, American women earned an average of 82% of what men made, limiting their ability to save for retirement. Some women may earn less due to pausing their careers to start families.
Healthcare Expenses
With their longer life expectancy, women may encounter higher medical expenses in retirement than men. These costs may escalate when women need long-term care or treatments for conditions older individuals commonly face.
Lower Social Security Benefits
Since many women have shorter work histories than men, financial planning for women must address the potential impact of lower Social Security benefits. As this disparity affects retirement income for women, financial planning is especially important.
Setting Retirement Goals
For both men and women, financial planning is more productive when it reflects a set of attainable goals. Some of the clearest, most reasonable goals include:
- Setting a target date for retirement
- Planning your desired retirement lifestyle
- Evaluating current savings and income
- Assessing future needs with retirement calculators
Circumstances can always change. It’s always worth leaving substantial room for adjustments in your retirement plan. Here are some areas that may need more focused attention.
Maximizing Retirement Contributions
Whenever possible, making the maximum annual contributions to a 401(k) account, traditional IRAs, or Roth accounts can help women grow wealth more quickly. Married women may also rely on spousal IRAs if they experience career gaps.
Investing to Grow Wealth
An investment account can produce significant gains in wealth for the future. It’s always good to maintain a diverse portfolio of several different types of holdings in various sectors and market caps. Tailor your investment strategy based on your risk tolerance, age, and time frame.
Planning for Healthcare
Medicare and long-term care planning are essential to consider before issues arise. Find out about Medicare eligibility requirements, coverage options, and extended care needs in retirement. Starting a tax-advantaged health savings account (HSA) and an emergency savings fund can be beneficial—talk to a financial coach about all your options.
Social Security and Pension Planning
Many women rely on benefits from Social Security or pensions in retirement. You may consider delaying the receipt of Social Security benefits until later in life since that might result in larger monthly payouts. Think about setting up spousal and survivor benefits, if applicable, in case of your passing early.
Financial Planning for Women: Essential Support for Retirement Planning
Thoughtful financial planning for women is essential to create a stable and confident future, including the retirement you’re dreaming about. At Balboa Wealth Partners, we work closely with our clients to develop personalized strategies tailored to their unique situations and goals. When you connect with one of our financial advisors, you’ll have a partner who listens, understands your challenges, and helps guide you every step of the way.
To start the conversation, give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com.
Scottsdale office: 480-801-5010, info@balboawealth.com
About Jeff
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Jeff and Balboa work with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
