Differences in Saving for Retirement for Men and Women

One would think that when saving for retirement, the rules would be the same for everyone. However, there are differences in saving for retirement for men and women. It is advisable that both men and women consult with a financial planner. They will have the best advice for saving for retirement.

Prior to the 1980s, most companies had defined benefit plans in place where an employer saved money for the employee and then paid them a percentage of their income each month for the rest of their lives after retirement. Now, however, employees have to contribute to a defined contribution plan and the employer pays only a portion of the cost at retirement. 401(k) and profit sharing plans would be included in this type of plan.

Traditionally, men have been the main financial provider. They are not expected to live as long as women, and are not expected to be the sole provider for their dependent children should their spouse die. Therefore, they have been advised to save for retirement, but generally have left the actual planning to the employer. Times have changed, however, and men are now realizing they have more responsibility and options when it comes to saving for retirement.

Women, on the other hand, are relatively new to the job market and worrying about what to do about retiring. Women are generally given different financial advice than men. Part of the reason women are given different financial advice is the fact that they are expected to outlive their spouses. They are advised to save more for retirement because they are expected to live longer.

Another reason women are advised differently is because women generally make less money and start to save later in life than men do; therefore, they end up saving much less than their male counterpart. Women haven’t been taught about financial planning and so probably avoid making financial decisions because they are afraid they’ll make a big mistake.

As a general rule, if a couple were to divorce, the children would most likely be awarded custody of any dependent children. This fact alone could make a huge difference in how a woman would be able to plan for retirement. If her ex-husband doesn’t pay child support as he should, she would have less money to save for retirement because she would be using it all for maintaining the household.

Both men and women would be wise to take advantage of any financial education that is available to them. Because there are differences in saving for retirement for men and women, both would benefit from education and advice from qualified financial planners or certified public accountants to help them make the best financial decisions about their future retirement.