What women need to know about saving for retirement

Three teachers on vacation having fun

Consider this

Women currently control about one-third, more than $10 trillion, of total household financial assets in the U.S., and this amount could jump to $30 trillion by the end of the decade.1

However, women face unique challenges that can put them at a greater level of financial risk than men.

  • 94% of women feel they will be responsible for their own finances at some point in their lives.2
  • 57% haven't figured out how much they will need to save for a comfortable retirement.2
  • 40% are not confident they will live comfortably in retirement.2

Keep in mind the majority of women report they are doing well managing their day-to-day finances, but are struggling with saving for emergencies, saving for retirement and building wealth. And 1 in 5 women say it is time to make a change to their finances.2

Live for today and prepare for tomorrow

With more women than ever responsible for their own financial well-being – and the financial well-being of their families – it’s critical that women know how to save and plan for their future.

The good news is that taking charge of your personal finances doesn’t have to be complicated. Here are four things you can do now to make your money work for you.

1. Manage your money

What do you do with your paycheck after bills are paid? Do you know how much you spend each month? How much do you want to put away?

Think about how you spend your money today and create a budget. Start by determining your net income. Then calculate your monthly expenses, including money you want to save, and create a financial plan for your future.

Check out our budget calculator or find a budgeting app that works for you and your family.

2. Establish and maintain good credit

Gone are the days when people carried lots of cash to pay for purchases. Instead, we reach for the convenience of credit cards, which can help establish a good credit history and credit score when managed properly.

Credit scores affect whether you can get credit, the amount of credit a lender will give you and the interest they will charge you. Generally, your credit score can range from a low of 300 to the highest score at 850. The higher your credit score, the better.

It’s important to keep track of your spending and not charge more than you can afford to pay. Let’s say you have a credit card balance of $2,000 with an annual percentage rate (APR) of 20%. If you don’t charge any more to the card and make the minimum monthly payment, depending on the how the minimum payment is determined, it could take 26 years to pay it off and cost almost $6,500 in interest charges! So, pay your balance in full each month, and if you can’t, pay as much as you can to avoid some of the credit card’s fees and high interest rates.

Resist the urge to open new credit cards for a quick discount. Too many open credit lines, even if they have zero balances, could be considered a negative mark on your credit score.

Paying your bills on time positively affects your credit score and avoids late fees, so it may help to automate recurring household expenses and other bills when possible.

You can get your free credit report once every 12 months at annualcreditreport.com. This is the only website authorized to fill orders for the free annual credit report you are entitled to by law. Other websites that claim to offer free credit reports, free credit scores or free credit monitoring are not part of the legally mandated free annual credit report program, and in some cases, the “free” product comes with strings attached.

3. Protect what you have

Keep in mind, women tend to live longer than men. Women have an average additional life expectancy of 20.6 years after age 65, making it essential for them to be prepared for increased expenses that life insurance may be able to help them with.3

Even if you don’t have a spouse/partner or children, if someone depends on you financially, you may want to consider some type of life insurance, and employer-provided coverage may not be enough. You may also want to consider life insurance if someone else would be responsible for your outstanding debts – like credit cards or repaying a mortgage – if you were to pass away.

You buy life insurance based on your age and your health, so buying it when you’re young and healthy typically makes it less expensive than when you’re older. And women tend to pay less for life insurance than men because they live longer. If you already have life insurance coverage, it’s important to review it regularly to make sure it is sufficient.

Did you know women are less likely than men to own life insurance? Only 47% of women own life insurance compared to 58% of men.3

4. Putting money away

How much money do you need for retirement? Experts say you will need around 80% of your pre-retirement income. This percentage is based on being able to eliminate certain expenses in retirement. However, if your retirement dreams include travel or pursuing other potentially costly endeavors, you may want to aim at 90% or 100% of your pre-retirement income. On the flip side, paying off large expenses like a mortgage or downsizing to more cost-effective housing can help you live comfortably on less than 80%.

Here are some key elements to understanding where you are in reaching your retirement goals:

  • Know how your state teachers’ retirement system works
  • Consider a supplemental retirement savings vehicle to make up the difference between what your pension will cover and where you want to be
  • Review your and your spouse/partner’s retirement plans regularly to ensure you’re on the right track

To review your current retirement strategy, life insurance needs or any other questions you may have, contact your Horace Mann representative.

1CNBC.com, Women are gaining power when it comes to money – here’s why that’s a big deal, May 2022.

2Bank of America survey, “Women, money, confidence: A lifelong relationship" , 2022.

3LIMRA, “Facts about Life” 2022. 

The information provided here is for general informational purposes only and should not be considered a recommendation, investment, tax or legal advice. Horace Mann Life Insurance Company underwrites Horace Mann life insurance products.