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Women and Retirement

Derek Ferriera and Martin Johnson
Posted: 8/9/2010

According to a study by the National Center for Women and Retirement, nine out of 10 women will be solely responsible for their finances at some point in their lifetime. Women living in affluence may feel at ease with the resources they will have in retirement. However, this ease may lend a false sense of security if they don’t realize that wealth must be strategically managed to last a lifetime.

Three life trends impact the retirement planning strategies of women:

  • Earning power. Women continue to earn less money than men – 79.9% of the median weekly earnings for men working fulltime – and many have worked fewer years because they’ve raised a family.1

  • Life expectancy. A 65-year-old woman is likely to live another 20 years,2 and older women (65+) outnumber older men at 21.9 million versus 16 million.3

  • Roles. Women are often nurturers who focus on taking care of others. They may not think about financial planning to help meet their own retirement needs.

To be confident that you can afford to retire and live the life you imagined, it is important to understand your core living expenses, your retirement income stream and the projected costs of anticipated travel, hobbies or purchases. The following are some financial planning tips that can help women solidify their futures, while taking into consideration the impact of their marital status.

Strategies to Solidify Your Financial Plan
Living within your means and paying off your debt (including your mortgage) lets you maximize your savings and preserve your assets. To achieve this, the first step is to review your budget. If you do not have one, create one based on expenses, income and goals. You can then create a systematic savings plan, which includes saving for emergencies, as well as planning for future needs such as health care and long-term care. Remember to pay yourself first, which means funding savings and investing goals first, and living on the remainder.

Considerations for Married Women
While entering into a marriage does not necessitate a merger of finances, by creating a financial plan as a couple you can ensure that you both agree to your strategies for saving and investing, and understand the impact of lifestyle decisions. An open discussion about attitudes toward money, spending habits, goals and liabilities will help you determine the best way to manage your expenses.

Some couples merge their assets after meeting individual liabilities. Others opt to have separate bank and investment accounts, but contribute to a joint household account. However you choose to fund your life together, seek advice for comprehensive retirement planning. You may be best served by making your retirement investments and plans compatible and diversified, even if you keep them separate. Additionally, discussing titles to property and accounts can help ease access or transfer ownership when one spouse passes.

If your financial plan is based on two-income earnings, it is important to discuss the contingency plan for your retirement income stream, should there be a loss of one income. For instance, purchasing life insurance helps a surviving spouse maintain their income stream, or pay off debt such as a mortgage.

It is also important to discuss your options for drawing income from a defined-benefit plan upon retirement. The distribution choice you elect could impact the income stream for the surviving spouse. For example, drawing less income per month may provide an important income stream throughout both of your lives.

The Impact of Divorce
The end of a marriage has a significant impact on your finances. According to research by Long Island University’s national Center for Women & Retirement Research, the average woman’s standard of living decreases 45% after a divorce, while a man’s actually rises 15%4. Working with financial experts during a divorce settlement, including your financial planner, tax professional and estate planning attorney, can help you reassess your financial worth to adjust your plans, if necessary, and reassign beneficiary designations.

Other life changes, such as the birth of a child or grandchild, also provide an opportunity to talk with your financial planner about your retirement plans. Outside of life events, scheduling annual reviews of your portfolio can help ensure your financial plan stays in line with inflation, market changes, new tax laws and your personal goals.


1 Institute for Women’s Policy Research, “The Gender Wage Gap by Occupation,” April 2009,
2 “Health, United States 2008, Table 26,” National Center for Health Statistics, CDC;
3 “A Profile of Older Americans: 2008,” Administration on Aging,
4 “5 Steps to Protect Your Financial Future After Divorce,” article posted on 4/19/09 at (

Derek Ferriera CFP(r), CLU, CHFC, REBC and Martin Johnson are registered representatives of Lincoln Financial Advisors Corp., a broker/dealer, member SIPC, and they offer investment advisory service through Sagemark Consulting, a division of Lincoln Financial Advisors Corp., a registered investment advisor. This information should not be construed as legal or tax advice. You may want to consult a tax advisor regarding this information as it relates to your personal circumstances.

Derek Ferriera CA Insurance License # 0665169
Martin Johnson CA Insurance License # 0B69397


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