Seven Retirement Roadblocks for Women – and How to Get Around Them

Only 12% of U.S. women who work are truly confident they’ll be able to retire comfortably, according to a report issued recently by the nonprofit Transamerican Center for Retirement Studies.

The report indicates that while women are dreaming of what they’ll do in retirement, not enough are taking steps to make their post-work years secure and comfortable.

Women have a few unique challenges: They live longer, generally earn less than men, and are more likely to work part-time or to take time off to care for children and/or elders.

Catherine Collinson, president of TCRS, notes that women are making progress with regard to opportunities for education and careers. However, the report quotes her as saying that women also “continue to encounter financial risks that put them at a distinct disadvantage compared to men with regard to retirement security.”

Here are some of the survey’s major findings. How many apply to you or to someone you know?

1. More than half (55%) of the women surveyed haven’t researched how much they’ll need to retire – they’re just guessing.

Since every individual’s situation is, well, individual, it’s hard to say how much you’ll need. So stop guessing! Instead, work with a fee-only financial planner to ensure your future well-being.

Can’t afford professional help just now? Start planning anyway. Brainstorm what your ideal retirement looks like. Staying put or downsizing? Working part-time after official retirement, or opting for a life of leisure? Travel or cocooning?

Next, educate yourself about ways to fund your post-work life. Learn about retirement funds by reading personal finance books, magazines and websites.

If you’re married or partnered, talk about his or her retirement assets. Only about one-third (32%) of the women surveyed consider themselves “very familiar” with the retirement plan and savings of their spouses or partners.

Note: Your retirement plan should not rely too heavily on someone else’s income, due to the possibility of divorce (it happens) or the chance that you’ll outlive your spouse/partner.

Got kids? Prioritize saving for your future over saving for theirs. Repeat after me: You cannot finance retirement.

Max out any workplace retirement plan that’s offered, especially if there’s an employer match. Maintain (or build) good credit.

Try very, very hard not to take Social Security too early, advises Emily Guy Birken, author of “The Five Years Before You Retire: Retirement Planning When You Need It The Most.” Filing before full retirement age can reduce your benefits by as much as 30% – and women already have lower lifetime earnings than men. According to AARP, the average annual Social Security benefit for women was $14,184, and the average for men was $18,000.

“Taking early benefits will reduce an already-small benefit for most women,” Birken says.

Related: How Much Do I Need to Retire? How to Quickly Figure Out Your ‘Retirement Number’

2. More than half (53%) of women said they intend to keep working until age 65 or beyond; 54% said they’d like to work part-time in retirement

The major reason cited was – you guessed it! – they don’t think they can afford not to work. On the face of it, that’s a good idea, because it reduces the chances of depleting their retirement savings.

But what if they get laid off before retirement, or an illness or disability strikes? The survey indicates that almost two-thirds (64%) of the women don’t have backup plans if they need to retire early.

The solution: Hope for the best and plan for the worst. Get that retirement plan in place, as noted above, and keep funding it. Should something prevent you from working past age 65, you need to be ready to live on such funds as you’ll have by then.

Create a backup plan, which may actually be a handful of tactics: disability insurance, moving to a smaller place or taking in a roommate, cutting expenses (lots of frugal hacks here on The Simple Dollar), delaying the start of Social Security.

Now is a good time to look for part-time jobs, to boost retirement and emergency fund savings. Sites like 1099 Mom, Freelancer.com and $ideHusl can connect you to job opportunities you wouldn’t have found on your own. Ideally, you’ll find gigs you can keep doing after retirement.

Speaking of new opportunities…

3. One-fourth would like to start a business or enter a new line of work after retiring.

Sounds exciting! But wishing isn’t the same as doing.

Would-be entrepreneurs should start learning now about what’s needed to create a business. Some potential sources: books, free webinars (from reputable companies), networking with local business owners, entrepreneur websites. It’s likely you’ll also need to learn about marketing, too.

Want to switch jobs? The same tactics can help you learn about new fields. Research is essential, vs. going with what “they say” the hot jobs are. For example, suppose you want to move from medical billing to being a virtual assistant because you heard that VAs make good money. Some do! But some don’t – and you might have to learn new skills, such as social media marketing or creating Pinterest-worthy illustrations.

That’s not to say you couldn’t do these things. However, you need to look before you leap. Find a mentor, or more than one. You might luck out and find a “women in business” group, or a group that focuses on your field of interest (tech, life coaching, whatever). The things you’ll learn from mentors and/or organizations will help you make informed decisions. You might even get your first clients this way.

Related: Small Business Grants for Women

4. Debt is an issue.

More than two-thirds (68%) of the women surveyed have consumer, student loan, and mortgage debt. Money that goes toward these obligations is money that can’t help them in retirement.

It’s essential to create a debt repayment plan that doesn’t jeopardize retirement savings. Attack credit card debt first, due to its higher interest rate – and then address the underlying issues for having consumer debt in the first place. Medical bills you probably can’t help, whereas a shopping habit can (and should!) be altered.

Track your spending for a month, to find out where your money currently goes. Next, build a livable budget that makes debt repayment a priority – again, without short-changing your retirement savings.

Since so many have debt, it’s no surprise that…

5. Women aren’t saving enough for emergencies.

A little over one in four (27%) women have saved less than $1,000, and 26% are “not sure.” (Yikes.)

Median savings among those surveyed: $2,000. While that’s not bad – it’s certainly better than nothing! – it’s also not enough. An unexpected problem could swallow that two grand in one gulp.

One automobile breakdown, essential home repair (hint: you can’t do without a functioning furnace), sudden medical issue, or unemployment, and your emergency fund is no more.

Lacking an emergency fund, women find themselves using credit to pay for that car repair or plumbing issue. If they’re unable to pay the card in full when it’s due, interest begins nibbling away at their finances.

The solution: Make “emergency fund” a line item in your monthly spending plan. Even if you can put away only a few bucks at a time, you’re building a safety net. Put another way: $3.33 per day adds up to $100 a month, or $1,200 per year. So start looking for ways to trim that small daily amount, and work your way up.

(Pro tip: Those side hustles/part-time jobs mentioned earlier are a good way to build your EF, once your high-interest consumer debt is paid down.)

Related: 10 Ways to Trick Yourself Into Saving Money

6. Medical issues can affect both earning power and quality of life.

Only 26% of women think about the long-term ramifications of their lifestyle choices, according to the survey.

The good news is that about six in 10 women are focusing on eating healthfully and getting medical care as needed (including health screenings and physicals).

As noted earlier, medical issues might take you out of the workforce before you’re ready – and poor health will not just cost you more in retirement, it will affect your quality of life. Thus if you’ve got some bad health habits, such as smoking, using illegal drugs, or drinking to excess, there’s no time like the present to begin modifying your behavior – or to be proactive by adopting good habits like exercise, getting enough sleep, meditation, maintaining a positive outlook, and learning to manage stress.

Work to improve one or two things at a time, versus trying to change everything all at once. That doesn’t work for New Year’s resolutions, and it probably won’t work for your health, either.

Related: Five Apps to Build Better Habits (or Break Bad Ones)

7. Women’s post-retirement dreams often cost money.

About seven in 10 women want to travel in retirement, while 61% hope to spend more time with family and friends, and 48% want to focus on hobbies.

Some of these things might sound inexpensive. But hobby supplies won’t buy themselves, and these days spending time with family could mean flying across the country. Non-family travel doesn’t usually come cheaply, either, unless you’re really good at using travel rewards cards and leveraging those points.

Birken suggests creating three types of retirement plans:

Blue-sky: What would you do if you had all the money you needed? Identify what’s most valuable to you – the things that “make you feel most fulfilled and content.”
Real life: Think about which parts of that dream retirement you’ll be able to fund with the money you’ll have once you stop working. This exercise helps you refine what’s most important, then get creative in paying for those things.
Plan B: Determine the worst-case scenario – the smallest amount of money you might have to live on when you retire. Base this on your Social Security benefit estimate plus your current savings (not what you will have saved by retirement). The object: figuring out the things that matter most to you, and reminding yourself that even if your finances go south you’ll have at least some of those things.

That last one, Birken says, is “an excellent motivator” to stay on track for retirement planning. Knowing the least amount you need to survive means that you’ll be OK no matter what. But why settle for less if you don’t have to? And since the blue-sky part of the exercise encourages you to dream, you’ll have specific reasons to save.

The Bottom Line

Good things generally don’t “just happen” to us. They’re the result of careful choices and specific actions, both financial and personal. In order to make your retirement dreams a reality, start planning now.

Veteran personal finance writer Donna Freedman is the author of “Your Playbook for Tough Times: Living Large on Small Change, for the Short Term or the Long Haul” and “Your Playbook for Tough Times, Vol. 2: Needs AND Wants Edition.”