Women Now Outlive Men by 6 Years on Average: How Does That Affect Our Retirement Math?
Written by
Gabrielle Olya
Edited by
Amber Barkley
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According to the latest data from the Centers for Disease Control and Prevention, women are now outliving men by an average of about six years. The average life expectancy for a man is now 73.5 years, while the average life expectancy for a woman is now 79.3. This means that the average woman will have to have enough money saved to cover an additional six years of retirement compared to the average man.
In this “Financially Savvy Female” column, we’re chatting with Maya Sudhakaran, head of growth and acquisition at Plynk, a personal investing app, about how women can calculate how much they need for retirement, the costs they should prepare for and how to save a sufficient amount for a long retirement.
How can women begin to calculate how much they need for retirement?
You have to think about the future [and] your own vision for life. [This includes] the set costs and fixed costs, and then the dynamic costs that you might be dealing with. Then you have to think about planning that out and charting that out.
What are some of the costs women should be prepared to pay over the course of those extra years of retirement?
[In terms of fixed costs], as an example, if you are living in an apartment that has a maintenance cost, I would consider that to be a fixed cost, because even if your mortgage is paid out, that’s something that you have to continue to pay on a month-to-month basis. Your groceries [are something you will need to pay for] on a monthly basis. Your electricity bill [is also] a fixed cost.
Some of the dynamic costs might be going on vacation, or your granddaughter is graduating from college and you want to get her a nice gift, [etc.]
What tips can you provide for women to build retirement savings, especially considering they need to plan for a lengthy retirement?
The No. 1 thing that we recommend to anybody [is that] automatic contributions are going to be key. What that really means is building that investing discipline, without having to think about it on a daily basis or monthly basis. If you are able to set up an automatic contribution, then you’re not even seeing that money — you can’t touch it, you can’t feel it. It’s in an investment account, where it is compounding while you’re sleeping. That type of discipline can take people a long way.
If you have access to an employer retirement account, the general rule of thumb is you should always take advantage. It’s important to think about where can you maximize based on your own contributions, as well as employer contributions.
In addition to that, you should stop thinking about that as your only retirement savings and think about where else you can plug into investing. That’s really where the automatic contributions outside of retirement accounts come into play. Women have to think about, what are the different avenues available to them and how can they maximize across them.
Women tend to start later in the investing journey. Just by the sheer fact that they are starting later, you’re already losing time gaining that compounding return. So in order to make up for the extra time [in retirement], the general piece of advice is don’t wait, start now.
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