Planning Retirement From Today- Why It Is Important For Women?

Retirement planning may be the last thing on your list of priorities. Especially if you are very young. It should, however, be at the very top. Not only because it's an important objective, but also because you're a woman. Don’t wait for your retirement age ladies, to begin income for retirement!

That's right, you read that correctly. When it comes to saving for retirement, being a woman puts you at a disadvantage because you will need to save at least twice as much as a male. Understanding how women's retirement planning differs from men's can have a significant impact on the decisions you make as you plan for your later years. 

As a woman, saving for retirement necessitates taking into account aspects that do not generally influence a man's retirement strategy. These could include "missed" work years spent as a stay-at-home mom, as well as the extra years a woman lives when compared to her male counterpart.

You must take control of your retirement planning now, whether you are single, married, raising children, recently graduated, or nearing retirement.

Women should be aware of these obstacles so that they may make informed financial decisions, especially as they approach retirement age. Here are five reasons why you should start preparing for your retirement as soon as possible.

1. The Gender Pay Gap

According to the Monster Salary Index, India's gender pay gap is enormous, with women earning 20% less than males (MSI). Men have a median gross hourly wage of Rs 231, while women have a median gross hourly salary of Rs 184.8. The pay difference widens with experience: while men with less than two years of experience earn 7.8% more than women, men with 11 or more years of experience earn 25% more. It's no surprise that India came in at number 108 on the World Economic Forum's Global Gender Gap Index.

2. Part-time work is more common among women, while employer-sponsored retirement plans are less common.

Part-time workers accounted for 30% of all female wage and pay workers in 2020. Only 19% of men in wage and salary positions worked half-time, in comparison. (These figures are higher due to the COVID-19 pandemic, although the gender gap existed before the epidemic and continues to persist now.) We also know that part-time occupations are less likely to provide retirement benefits.

3. Women take more time off from work

Typically, women are the ones who take on the job of caregiver. Mothers are more likely than fathers to cut back on work hours in order to care for a kid or family member. In addition, women make up around 58 percent of long-term caregivers. In general, more time away from work means less opportunity to save. The retirement plan for self-employed women becomes even more important because of the high-risk income.

4. Women live longer than men

According to statistics, women live longer than males, which implies their savings must endure longer. A 65-year-old lady can expect to live to be 86 years old on average. That's a total of 21 years in retirement, nearly three years more than males. This emphasizes the importance of women accumulating substantial retirement nest money.

5. You don’t know what future beholds

The investments you invested your money in didn’t work out. A severe health crisis showed up and you had to spend a fortune over the treatment. You decide to stay single for life, decide to get separated from your spouse, you become a single mother, and so on. The future can hold a lot that we may never expect. It is always advisable not to think negatively or be pessimistic. That is true. One should not think negatively. But, you always have to be prepared for the worst. Precaution is always better than cure.

Summing it up

Many of these concerns, in my opinion, can be rectified. The first step is to figure out what you want based on your financial situation. I agree that men and women should be paid equally for doing the same job. Men, on the other hand, do not always save enough to maintain their lifestyle in retirement.

Most people, in my experience, benefit from some kind of customized planning. The most difficult aspect of many people's plans is sticking to them. Many people hold their investment advisor responsible for meeting investment return targets, but they don't hold themselves responsible for saving goals.

Don't put off planning. Higher savings rates, the need to take on greater market risk, retiring later, or, worst of all, lowering your retirement lifestyle are all costs of waiting.