Today, women are more in control of financial management than ever before, with the majority overseeing the day-to-day administration of their household finances. When it comes to long-term financial planning, however, there’s opportunity for women to be more actively involved, especially when it comes to retirement income planning. Just 43 percent of women who are part of a couple regularly attend financial planning meetings, leaving the bulk of these conversations to their significant other.1
Delegating long-term financial planning duties may seem like an efficient way to divide tasks, but it isn’t necessarily a productive approach. Retirement income planning requires effective collaboration and full participation by both partners, to ensure life in retirement will meet both partners’ objectives
Consider the following trends as you work solely or with a partner on your retirement income plan.
Longevity trends have upped the ante
“We need to make sure that we have funds available for living longer than we thought,” says Certified Financial Planner Jennifer Williams, Senior Vice President, Private Financial Advisor with SunTrust Investment Services. “When I started in this business, life insurance actuaries were insuring up to 100 years. Now most of the insurance companies are providing illustrations insuring people up to 120,” Williams says.
The cost of healthcare is of special concern for modern retirees. Medical advances have blessed men and women with a longer life expectancy, but higher medical bills often accompany these additional years. In fact, health-related expenses increase at about twice the rate of overall inflation.2
Well in advance of this life stage, investors should decide whether they’ll cover long-term care expenses out-of-pocket or through an insurance policy. “Women tend to use long-term care longer, which means they need more money available for it,” Williams says.
Income requirements may ebb and flow
Retirement can last decades, so it’s common to have three distinct phases: early, middle and late. Your income needs will largely depend on your lifestyle and medical expenses.
In the early years, as you take advantage of good health and newfound leisure time, you may require a higher income to support an active lifestyle full of travel and hobbies. Later, your income needs may be less as you stay closer to home and family. In the later years, medical bills may necessitate a higher income once more.
Family obligations and favorite causes should be part of your plan
Caretaking can also affect retirement income needs. An ailing spouse may have high medical expenses, aging parents could require long-term care assistance and adult children may request financial support if they haven’t yet settled into careers.
What’s more, estate-planning priorities should be part of all retirement income discussions. Women and their partners must ask themselves and each other what their objectives are for wealth transfer, as it’s a delicate balance between leaving a legacy, providing for heirs and maintaining an income that supports their retirement lifestyle.
With these variables in mind, a retirement income plan should incorporate all sources of income available, Williams says, including pensions, Social Security, annuities, retirement savings, taxable savings and rental property, if applicable.
An advisor can help address your retirement income needs
Once you have a good idea of your post-retirement lifestyle and the income needed to support it, you can work with your SunTrust advisor to create a customized plan with the online planning SummitView® solution. “The SummitView tool helps us work backwards to determine how much savings we need,” Williams explains.
Whether you’re single or have a partner, a rewarding retirement is possible when you participate fully by taking control of your time and money. The earlier you start planning, the more time you have to pursue your passions, fulfill your obligations and take full advantage of life’s third act.