Retirement Planning for Women

Last Updated on May 24, 2023 by Alexandra DeLuise

Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t  believe is valuable

“Women are much more likely than men to have a savings shortfall in retirement. By extension, they’re also more likely to rely exclusively on Social Security for their in-retirement living expenses.”

Christine Benz in Morningstar

Retirement planning for women is crucial. Social Security benefits for women are typically less than for men. Unfortunately, women typically earn less and live longer than men. Women’s retirement savings tends to be less than men’s as well. It follows that women’s retirement income tends to be lower than that of men.

Women and Retirement

The women vs men, pay, retirement, and investing comparisons are jarring. That is why women need to plan for retirement now, and learn about money management for themselves.

Retirement challenges for women include:

  • Women work fewer years than men.
  • Women earn less than men.
  • Women are more likely to work part-time.
  • Women typically have smaller retirement savings accounts than men.

Fortunately, there are many tools and platforms available to propel womens’ saving and investing for retirement. And much of those nudges, are grounded in small steps towards the goal.

Nobel prize winner, Richard Thaler‘s book Nudge inspired the 401k trend to encourage firms to automatically opt in employees into the company retirement plan. That means if you don’t want to participate in the plan, you have to cancel your opt in, which makes it easier to save for the future than not.

Money Advice for Women

Numerous studies show that women are actually better investors than men. Where they fall short is in a lack of confidence in their own financial abilities. So, by arming women with the tools necessary to prosper financially, they can improve their retirement planning and lifetime access to wealth.

First, get real with your present finances. Take the simple steps of tallying your income, expenses, and assets. That means, understanding your net worth. In fact, the Empower dashboard and financial tools can automate this process for you.

Once you know where you stand, financially, you’re ready to develop a retirement plan. But, to help with this task, it’s useful to imagine how you want your financial future to look. This helps motivate you to make the changes necessary to divert some of your earnings today, into wealth for tomorrow.

Begin your retirement planning with a plan to contribute to a 410k and/or IRA account. These are retirement accouts that are designed to help you reach your future lifestyle.

The best way to save for retirement is through automation. Every month, have a portion of your income transferred into your 401k or IRA account. Once the money is missing from your checking account, you’ll tend to get used to living on what’s left.

Next, you’ll need to choose the best investments to meet your goals. Fortunately, there are many tools to help you select investments that fit with your timeline and risk tolernce. One of the platforms we like for choosing retirement investments is Blooom. Blooom strives to help you minimize investment fees, which ultimately leads to more of your money growing within the financial markets.

Take an eyes wide open approach to retirement planning and include scenarios for long term care and health costs as well. If these don’t come to pass, you’ll feel content that you implemented a wise financial planning approach.

Finally, make sure to build in retirement income for fun activities too!

How to use the Empower Retirement Planner to Reach Your Finanical Goals

Retirement planning is so crucial to your financial future. Fortunately, there are many free and low fee tools to help with this task. The Empower (formerly Personal Capital) Retirement Planner is ideal for a women’s specific circumstances.

Although everyone needs to pay attention to retirement planning, women’s specific financial needs up the importance of this task.

In light of these challenges, finding a retirement planner that accounts for these scenarios is key.

What is Empower’s Retirement Planner?

Empower is a large money management system, but for today’s article I focused specifically on their retirement planner. The Empower retirement planner has many of the features you would expect it to, including linking retirement accounts, asking users questions about their saving plans and other large purchases or financial commitments, and running scenarios to determine likely outcomes.

The Empower retirement planner is free to use, and the basic features were all I needed to get a good idea of how my current investments and financial goals will impact my plans to retire.

When you first sign up for an account you are prompted to link your accounts. I chose to link one of my 401ks, which immediately displayed on my dashboard. At any time you can link other accounts or add assets such as property or portfolios. The more you add, the more clearly the projections can accurately calculate your chances of financial success.

After you link an account, you can proceed right to the retirement planner. From this pace, the system asks a few questions about your income, yearly savings, anticipated retirement age, and whether you have a spouse and children.

It’s very easy to add different spending and income changes to the retirement planner. You can also design different possible scenarios (Should you buy a $250,000 home or just an RV?) and compare your results to see what factors help you reach your desired outcome more clearly.

My Experience with Empower’s Retirement Planner

I had a lot of fun creating different possible scenarios through this planner. Overall, I found the platform use intuitive. It was easy to add potential purchases and income increases to get a better picture of what I might need. Below is a review of some of my experiences playing around with the planner.

Everything in One Place

One of the best features is that the retirement planner allows users to link multiple retirement accounts to see everything in one place! I’ve had a few careers with retirement plans. This planner has, everything displayed as one cohesive whole makes. It makes it much easier to analyze and plan for retirement. Having retirement savings in multiple different places can be overwhelming, and it’s easy to lose track of where things are.

Why this is good for women: poor maternity leave options, the cost of child care, and low wages may cause some women to leave jobs more frequently than their seemingly more stable male counterparts.

The last thing most people want to do when they are changing jobs is worry about 401k rollovers, and after leaving a job it can feel like your access to that money is more difficult than it should be. If leaving your retirement funds where they are makes the most sense for your situation, at least linking them under the same planning tool helps you keep everything in perspective.

Actually, when my sister wanted a way to view all of her investment accounts in one place, I suggested that she sign up for the free Empower Dashboard. The sign up is fast and easy and the financial overview rivals paid investment managers. 

Empower Retirement Planner, Adding Scenarios—Hey, Why Did That Drop?

As I projected various scenarios and estimated my retirement spending, Social Security benefit and another pension, Empower ran through a few thousand possible scenarios. They gave me a 99% success rate of meeting my retirement goals.

Then, I started adding some scenarios to find out what would change. As I added various expenses, like a home downpayment in a few years and increased spending, the retirement scenarios shifted.

The Recession Simulator, which you create in the “scenario view” tells how your investmetns will fare if there is a recession at a date of your choosing. For example, if you expect to retire at age 65, the recession simulator will show how that will affect your financial projections.

Choose a robo-advisor in under one minute: ROBO-ADVISOR SELECTION QUIZ

What’s nice about Empower’s retirement planner is that it has a visual representation of your retirement projections. Although, the tool can only calculate scenarios with the information you give it. If you forget to update your yearly savings or spending goals, the retirement planner won’t reflect the new realities.

Within the retirement planner you can tweak your yearly savings goals to boost the potential for success. As an added bonus, the Dashboard reflects progress to your yearly savings goals and lets you know how much more money to save this month to reach them.

Keeping Things Realistic

I appreciated how every change I made adjusted the projections visually. When you add a $25,000 wedding in the near future, you’ll see how your savings will dip, and then rebound. This was an indicator to adjust savings in order to meet a goal and keep retirement on track.

You can also add estimates to account for children you have now or may have in the future.

Why this is important for women: Bringing a child into the world can be a double whammy for women. Due to sheer biology, women’s careers tend to be affected by childbirth and less-than-ideal maternity leave options depending on the country of residence. Also, since childcare costs are sky high, two-income families might opt to have one parent stay home. Since women are frequently paid less than men, they tend to take time off of work and return after the children are in school. This means less money made over the course of their working lives.

It’s very quick and free to sign up for the Empower Retirement Planner. After a quick sign up, link accounts and click > Planning and next click > Retirement Planner.

Empower is a Great Retirement Planner for Women

I had a lot of fun looking at retirement prospects with this tool. It’s easy to use and has many of the most common scenarios prominently displayed whether you are adding assets, a large purchase, or a sudden life changing event.

Overall, I really enjoyed how customizable my projections were. Everything I added or removed was instantly calculated by the program and created a ripple effect, which I could see reflected in my asset growth chart.

Although the retirement planner is great at anticipating what might happen with your current situation, it’s also an easy and convenient way to predict how your hopes and goals can actually support your goals. And, the Empower Retirement Planner is not for women only, it works just as well for men!

Empower FREE Portfolio Review

If you sign up for the free Empower investment management tools, and your aggregate linked accounts are worth more than $100,000, you’re eligible for a free portfolio review, by a financial planner.

Click on the button below, sign up and get your investment portfolio reviewed by a Certified Financial Planner (no strings attached):

Just sign up with the link, connect your accounts and wait for a call from the Empower representative!

Investment Planning for Women – Bonus

If you haven’t yet begun to save and invest for retirement, it’s not too late. Ellevest created an investment manager for women that is low cost and offers a host of value for the price. Read more about it in the Ellevest Review.

Retirement Planner for Those Short on Cash

Retirable is a new financial advisory service for those without a huge amount of cash. If you’re nearing or in retirement, and you need an income stream, Retirable has you covered. Designed for retirees and those age 50 or older, Retirable provides financial advisors and investment portfolios structured for your stage in life. Fees are reduced, the more assets you have.

Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t believe is valuable.

Empower compensates Stocktrades Ltd for new leads. Stocktrades Ltd is not an investment client of Empower.

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Alexandra DeLuise

Alexandra is a banker-turned-English-teacher from the New England area of the United States. When she isn’t working with college writers, Alexandra can be found reading and writing about investing, personal finance, and the ever-growing student debt crisis. She combines her banking experiences with a love of the written word to share accessible financial tips with real people.