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I am often asked about the retirement threats specific to women because one of my companies, Woman’s Worth® LLC., specializes with the unique lifetime income planning needs of women. You would think women have the typical retirement risks we find with all baby boomers regardless of gender: taxes, market volatility, and inflation. Let me get the record straight: Your greatest retirement risk is LONGEVITY! That’s the good news and the bad news because living longer means longer periods of having to fund an active lifestyle (that’s the good news) but coupled with that, longevity means that women have a higher risk of suffering debilitating illnesses, spending more on healthcare costs, which are skyrocketing, and have a higher risk of ending up in skilled nursing care (that’s the bad news). Living longer means that you need to make sure your money lasts as long as you do.
Planning is the key to making sure you have the financial resources to achieve your goals whether you live to 80, 90 or beyond 100. The fastest growing segment of the population is the 90+ generation. If you want to mitigate the risk of outliving your retirement nest egg, you need to create a financial life plan to help you understand what it’s going to cost you to get retired AND stay retired.
To protect yourself from longevity risk:
-Get real with your lifestyle expenses based on today
-Vision what your desired lifestyle scenario is going to look like
-Find a financial guide that speaks the language of planning not investing to identify the future cost of your retirement through age 100
-Account for the traditional risks (inflation, taxes, market risk, etc) as well as longevity risk and complete a gap analysis (current lifestyle costs vs. future)
-Create customized solutions to close any of the gaps identified
Change your paradigm about retirement from financial planning to life planning because at the retirement life stage, the only purpose of money is to achieve your desired lifestyle. How much will your lifestyle cost you? A plan will answer this ever most crucial question that begs the need for a response before you get that golden handshake. Remember, your plan should be as unique as your DNA – no one size fits all life plans because your retirement journey is going to represent YOUR BEST LIFE YET!
Jeannette Bajalia is a retirement planner who founded Woman’s Worth® after 35 years of professional experience within the financial services industry, in major corporations, and as an independent business owner. Her intimate, in-depth understanding of women’s finances – and their related emotional and physical health effects – gives her a unique perspective on helping women plan their financial futures. She is author of the books Wise Up, Women!: A Guide to Total Fiscal and Physical Well-Being.