Do women need more savings than men for retirement?

16th December: Do you think that women should save more than men in order to enjoy the same comfort level of retirement?  

16th December: Do you think that women should save more than men in order to enjoy the same comfort level of retirement?

Yes, indeed, women do need to save more as compared to their male counterparts for a number of reasons which are discussed below.

Although majority of women might fail to see that they need higher savings for retirement than men, but, it is a fact.

In fact, there is a gap of six-figure amount between the retirement costs of men and women. And the females have to encounter many difficulties in savings because their incomes are comparatively lesser than the males and also because they need to spread their incomes over a longer duration of life after their retirement.

According to co-author of ‘Pensionize Your Nest Egg’, Moshe Milevsky, retirement costs for women are 20-25 percent higher than men since women have a longer life span and they marry older men.

So, while men can comfortably withdraw 4,2 percent of their savings annually, women need to act conservatively and withdraw around 3.7 percent of their savings after reaching the age of 65 years so as to stretch their savings for their remaining life.

No wonder, higher life expectancy of women than their male counterparts compels them to lower their standard of living much below their expectations after reaching post-retirement age.

And if women do not care to plan their finances carefully, they will have to live with less income after reaching retirement, warns BMO Retirement Institute’s head Tina Di Vito.

Ms. Di Vito states that it is quite difficult for a woman to assume that almost 50 percent of the total income gets eliminated after the death of her husband.

And another fact worth consideration is that on the death of the husband, the wife is no longer entitled to receive the benefits of Spousal Old Age Security, clarifies Ms. Di Vito adding that women who had been employed and receiving maximum benefits will be excluded from the CPP survivor benefit.

So, this is going to result in a shortfall of around $16,000 in the very first year of the death of the husband, she adds.

Health is yet another expenditure for women in their post-retirement period especially as women are more prone to have poor health conditions involving high costs. And this will strain their financial budgets, states head of retirement strategies at RBC, Lee Anne Davies.

Hence, women need to learn a lesson that they must save more for living a comfortable life after retirement.

Liked the above Article? You may be interested to try the following products too!!