TomorrowMakers

Women need to pay more attention to their retirement planning due to various reasons. Read further to find out why and how.

Retirement planning for Women

According to a survey done by financial consultancy Ameriprise, a staggering 79% of middle-class women do not consider retirement planning in their top financial goals. A secure retirement plan should be everybody's top priority. Unfortunately for women – married or single, it is slightly tough. 

One of the chief reasons why retirement planning for women is different compared to that of men is the former’s higher life expectancy. This requires women to plan for a longer period. Another fact to be considered is how women often have less financially productive years due to family responsibilities; this requires for them to save even more. 

As per a survey by the Center for Talent Innovation, 36% of India's college-educated women left their jobs for childcare or work-life balance issues. These statistics indicate that proper retirement planning is very critical for women. 

To ensure a financially secure future, here are some tips to follow and plan retirement better:

Start early

Always remember – the earlier, the better. Some women think that their careers have just started and they have ample time to think and plan. You can even start with saving 2-5% of your monthly income and up the amount gradually with increasing age and income.

Increase the amount you save

Women must increase the amount they save with time. A research done by Aon Hewitt indicates how women contribute only 7.5% of their salaries to their savings accounts. You also need to save more because a Monster Salary Index (MSI) study shows how women earn 20% lesser than men. 

Women must save at least twice as much as men. This could mean at least 20-25% of your salary, says Financial Planner Pankaaj Maalde. Also, women must save more in the Voluntary Provident Fund along with the EPF. It is an example of forced savings where your money will be deducted directly from your salary even before it reaches your account. 

Seek professional help to invest better

Professional advice always works better than investing on your own as it will significantly improve your retirement funds. According to a study by Pershing LLC - Women: Investing with a Purpose - financial advisors must provide sound financial planning advice to women by helping them understand the challenges that may come their way and how to resolve them.

Your asset allocation must be rightly done. It is advisable to invest largely in the equity instruments like equity or balanced mutual funds to get high returns over a long period of time. Judge your risk appetite and then invest smartly. 

Retirement Planning for Women


Don’t ignore workplace advantages

Financial awareness programmes are regularly conducted in various organisations. Additionally, there are often attractive group retirement policies for employees to make the most of. Work such policies in your organisation to the best of your advantage. 

Let your partner be aware

Always discuss with your partner the earnings versus allocation ratio for your retirement plan. Also, compare your portfolios and ensure they are in sync. In most marriages, it is the husband who takes all major financial decisions and women are hardly aware of it. It is important that both partners are aware of their financial positions. In the unfortunate event of a husband’s death, the wife will then be better prepared to handle the financial situation. 

Thus, retirement planning is not only a crucial goal for women but also it is an important financial decision. You need to be proactive in handling your finances to have a safe and comfortable retired life. 

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or insurance or legal advice. You should separately obtain independent advice when making decisions in these areas. 

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