The Longevity Risk

3 Retirement Considerations for Women

A vastly different path of preparation

by Dr. Daniel Crosby

Educated at Brigham Young and Emory Universities, Dr. Crosby is a psychologist and behavioral finance expert who helps organizations understand the intersection of minds and markets. Dr. Crosby’s ideas have appeared in The Huffington Post and Risk Management magazine, and he writes monthly columns for and InvestmentNews.
Dr. Crosby is an independent contractor and is not an employee of Guardian Life Insurance Company of America or any of its affiliates.

Women and men are equally as likely to be saving for retirement, according to the 2014 Retirement Confidence Survey by the Employee Benefit Research Institute. Fifty-seven percent of both men and women report saving for retirement; and they’re equally (27% versus 24%) as likely to have an individual retirement account.

Both men and women have a median expected retirement age of 65. However, women walk a vastly different path than men when preparing for retirement.

Whether fully-employed or maintaining a full-time role managing the household, women should be aware of these factors when planning for retirement.

Life Expectancy

Most Americans will spend over two decades in retirement. According to the National Center for Health Statistics, an average 65-year old male can expect to live another 17.7 years, almost to age 83. An average 65-year old female can expect to live another 20.3 years, a bit beyond the age of 85.

A longer life expectancy increases the total years that you may receive payments from entitlement programs such as Social Security. However, it also increases the total time that you’ll be dependent upon your retirement savings and the likelihood that you’ll outlive your retirement savings plan. Women’s longer life expectancy also means that they’re more likely to have the need for long-term care.

The National Academy on an Aging Society reports the average lifetime cost for long-term care for women who reach age 65 and need care is $240,000.

Your Professional Career

According to the Women’s Institute for a Secure Retirement (, women earn about $0.77 for every dollar a man earns. Over the course of an entire career, a typical 25 year old female with a college degree will earn about half a million dollars less than a college educated man.

While income disparities put women at a fundamental disadvantage for retirement savings, career tenure can have a significant impact as well. As most employer-sponsored retirement savings plans (whether defined benefit or defined contribution) require a vesting period in order to receive the full benefit of the employer’s contribution to your plan, keep this in mind if you are considering leaving your current company. Shorter tenures can result from a variety of factors, from the decision to start a family to changes in career direction.

While income disparities put women at a fundamental disadvantage for retirement savings, career tenure can have a significant impact as well

However, the result always impacts the retirement bottom line: A shorter job tenure hinders women’s ability to capture the full employer match when a vesting schedule is in place, if their workplace retirement savings plan offers this feature.

Spouse and Survivors Benefits

In many cases, women depend on their spouse to be the primary wage earner for the household. If you’re the secondary earner, or without any earnings at all, it’s critical to understand the resources available to you and your benefits as the beneficiary of retirement or life insurance plans.

In 2015, full-time homemakers are eligible to make an IRA contribution of up to $5,500 per year, and those aged 50+ can make an additional $1,000 catch-up contribution. Even if you have never worked, you may be eligible for Social Security benefits* if your working spouse is eligible for benefits. However, in every case, waiting until your spouse reaches full retirement age (66-67 depending on the year you were born) before drawing benefits will help you receive the maximum benefit possible.

If you are the beneficiary of a pension plan, defined contribution plan or an IRA, for example, it’s essential to properly enroll as the beneficiary and to review the records of each plan periodically to make sure the information is up-to-date. Review each savings plan for the survivor’s benefit stipulations and make any necessary arrangements to protect your savings.

*Benefits may also be available for a divorced spouse, surviving divorced spouse, widow and widower.



2015-3498 2014 RCS Fact Sheet #5: Gender Comparisons Among Workers.
National Center for Health Statistics. Health, United States, 2013: With Special Feature on Prescription Drugs. Table 18
Eileen J. Tell and Nancy Morith. Long-Term Care Insurance: Benefits, Costs, Options. National Academy on an Aging Society. Public Policy and Aging Report. Volume 23. No. 1. “5 Things Mothers Should Tell Daughters About Money and Retirement.” 6/1/2013
U.S. Dept. of Labor, Bureau of Labor Statistics. News Release, Sept. 18, 2014, USDL-14-1714. Table 1.
This material is intended to potentially assist you in planning for your future. The Guardian Life Insurance Company of America (Guardian) and its affiliates, subsidiaries, employees, agents, and outside contributors, are not authorized to provide legal, tax, or investment advice in the materials of this website including but not limited to any blogs.
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