Plan Now To Avoid Retirement Risks

While the following advice is targeted for women — men, keep reading — there are valuable lessons for all of us about how to plan now to avoid retirement risks.

Plan now to avoid retirement risks and increase your chances of a long and financially secure retirement.

Plan now to avoid retirement risks

Statistically, women continue to live longer than men. This puts the security of their retirement at greater risk in spite of the dramatic growth in the number of working women and the slow — some might say glacial — movement toward salary equality with men.

Anna Rappaport, an aging and retirement expert and spokesperson for the Society of Actuaries (SOA) reports:

I think we thought that because women have been working more, that the [financial] gap between women and men would have gotten a lot better by now. If you asked us 10 or 15 years ago, we would have said that gap was going to go away. But it hasn’t.

This gap poses serious problems for women in their golden years, but similar situations can affect men as well.

Research by the SOA puts forth a compelling case that women and their spouses face a very unpleasant future unless they do a much better job of managing their assets and income today. And that future, sadly but realistically, is likely to eventually involve just the woman.

Tbe good news is there are things you can do now — and plan to do in the future — that will reduce the risk of a financially shaky retirement.

In addition to setting aside more retirement funds, Rappaport advises women to think more carefully about Social Security claiming strategies. The goal is to maximize older-age income. By continuing to work past age 65, for example, it might be possible to delay Social Security benefits. For most people, the current full retirement age for claiming Social Security benefits is 66. If benefits are claimed as early as possible—at age 62—the lifetime monthly benefit will be only 75 percent of what it would be if benefits were not elected to start until age 66. And for each year beyond 66, the benefit of delaying election increases by 8 percent a year for the next four years. (Except for annual inflation adjustments, Social Security benefits are usually capped at age 70.)

Work longer, postpone taking your Social Security benefits, save more, these are solid — although perhaps distasteful — strategies. But something else we don’t often think about can have a devastating effect — the need for long-term health care.

“Another big issue for women is planning for long-term care,” Rappaport says. “They live longer but also face longer periods of disability.”

It’s been truly said that old age is not for sissies. But there’s much we can do to prepare for an uncertain future. Plan now to avoid retirement risks and increase your chances of a long and financially secure retirement.

Click here to read more about how you can plan now to avoid retirement risks.

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