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Retirement Ready

Working women with families have unique retirement needs

May 23, 2016

In this age, more often than not you can find moms who are balancing family life along with active careers outside the home. In some cases they’re caring for young children, while also taking on the added burden of caring for aging parents.

In 2014, the United States Bureau of Labor Statistics found the rate of mothers in the labor force with children under the age of six was at 64.2 percent. The number of moms in the labor force increased to 74.7 percent when the youngest child was aged six to 17.

Having both a family and a career makes it important for these moms to consider their own retirement needs.

The U.S. Department of Health and Human Services’ (HHS) Administration for Community Living found that a child born in 2013 could expect to live an average of 78.8 years. That was about 30 years longer than a child born in 1900.

The department also learned that those children who reached age 65 had an average life expectancy of another 19.3 years. It was even higher for women at 20.5 years, and a bit lower for men, at 17.9 years.

Women aged 25 to 50 may find themselves living up to the age of 80, or longer. The Centers for Disease Control and Prevention’s National Center for Health Statistics and National Vital Statistics System shows average life expectancy for this group of women to be between 81.9 and 83.2 years old.

Those statistics showing the longevity of female life may make women feel insecure about their financial futures, but with proper planning, they can become confident about their retirement years and future financial state.

Research options

To start the retirement planning process, do your research. Find out about the retirement plans offered by your employer and/or your spouse’s employer. Do the available plans offer a defined benefit pension plan which will provide a fixed income after retirement? If so, investigate the payout options.

Things to find out:

  • How much income can you expect to receive?
  • Is there a cost-of-living adjustment on the payouts?
  • How are payouts reduced when providing income for a surviving spouse?
  • Does your employer and/or spouse’s employer offer some other type of retirement plan such as a 401(k) plan or SIMPLE IRA plan?
  • If so, how much can you contribute to the plan on an annual basis?
  • How much would the employer contribute?
  • What are the investment options for these plans?

Also consider what you could get in Social Security benefits on your own or from a spouse if they were to die. To find out what your Social Security benefits could be when you retire, contact the Social Security Administration at 800-772-1213 or visit ssa.gov.

Determine goals

Having gathered the above information, determine your retirement goals by estimating your living expenses at retirement. Make your short and long-term savings goals specific and achievable.

To help accomplish this, create an emergency fund to provide for your family in the event of a catastrophe. This includes a cash reserve large enough to cover three to six months of living expenses. Secondly, consider purchasing life insurance to replace your income and provide for your family in the event of your death. You should also plan out how to manage your debt and cover health care and disability expenses.

Also, consider maximizing your avenues of retirement income with an Individual Retirement Account (IRA). There are two types, Traditional and Roth. The type of IRA you decide to fund depends on many factors, such as your taxable income and whether you or your spouse participates in another type of retirement plan. Consult with a financial advisor to decide which IRA is right for you.

Take action

The most important step in planning for your retirement is to put your plan into action immediately. Share your goals with your family, and review them often. If things don’t happen as you originally planned, refine your goals and action plan and continue moving forward. 

Today’s women have many responsibilities beyond balancing work and family life, but they can’t let those overshadow the need to plan for their golden years. By researching options, determining goals, finding trusted advisors and taking action – women can look forward to retirement knowing that their financial future is secure.