Women are statistically different than men making Financial Planning especially important for several reasons.
• Although women have greater life expectancies and typically outlive their spouses, their aggregate retirement savings are 50% smaller than men according to a Vanguard study. This is not due to savings behavior, but rather the higher wages of men which are about 25% to 33% higher than women. This equates to women needing to save more for retirement, and sooner!
• According to Transamerica’s 2018 Annual Retirement Survey of American Workers, the median household retirement account for women is $42,000, yet women believe they need to save $500,000 to feel financially secure in retirement. Women often work part-time or take time off from their careers to raise children or care for aging parents. This, in turn, leads to reduced retirement savings and social security benefits jeopardizing retirement goals.
• Emergency savings are dangerously low for women. Transamerica’s survey reports that women have saved just $2,000 in emergency savings compared to $10,000 among men. These savings are vitally important to help cover unexpected financial setbacks such as unemployment, medical bills, home repairs and other unforeseen expenses. Inadequate cash reserves can lead to dipping into retirement savings, additional borrowing, home foreclosures and even bankruptcy.