On average, women retire two years earlier than men, yet live five years longer. That’s a problem, as this leaves many women with a considerable gap in retirement funds. There are ways to combat this shortfall, but they are often easier said than done.
One solution to this problem is for women to work longer. However, that’s not always an option. According to a recent study from Fidelity, the number one reason most women retire early (prior to turning 65) is because of health concerns — not necessarily to care for themselves, but to care for a spouse or an older parent. That doesn’t mean they don’t have to eventually face their own pricey healthcare costs in retirement. The same Fidelity study estimated that women over 65 will need $147,000 to cover medical costs during retirement, compared to just $133,000 for men. Opens a new windowAs Reuters reports, that’s not including long-term care. If you’re considering leaving the workplace early to care for a family member, you may want to explore other options including rallying siblings. Perhaps if the duties are split up, it would allow you to work longer and not have to pay for care.
Even when women do end up working longer, on average they still end up working less than men. A Merrill Lynch report found that women spend an average of 44 percent of their adult lives out of the workforce, while men only spend an average of 28 percent of their lives out of work. That results in a gap in ultimate retirement funds. And women are still paid less than men. If women were paid equally — they still earn about 84 cents to every dollar men earn — it would go a long, long way toward solving this issue. If only it were that easy.