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Financial Planning for Successful Women: Mitigating Risks of Living Too Long

It seems to be a biological fact that women statistically live longer than men. Based on 2021 CDC data, the average life expectancy was 79 versus that for men at 73. And living longer can be a benefit but also a big risk when it comes to being financially secure through retirement and into the ‘golden years.’ In my years of working with successful women, I have also worked with many who are retired, many of whom are divorced or widowed. And that alone can bring on some other financial planning considerations. So, what are some thoughts and ideas to plan for as you may live to 80, 90, or even 100?


Income Needs:

The reality is that retirement should be a time to be enjoyed, money spent traveling, spoiling grandkids, and living the life you design. We also know that a dollar today will buy more than it will in the future due to inflation. With that, a couple of considerations for successful women as they build assets to help mitigate the risks of living too long.

  • Roth 401k/IRAs: In addition to having tax-free income in retirement, Roth accounts have no Required Minimum Distributions (RMDs) that begin at 73 (turning 73 in 2022 or earlier) or those over 75 (turning 74 after 2032). RMDs begin at just under 4% of your account value and must be withdrawn annually from IRAs, 401ks, 403bs, and any pre-tax accounts. This % continues to increase as you age, which could have a draining effect on assets. I usually recommend some Roth assets in retirement to be used as the “late in life” bucket.

  • Brokerage Accounts: Think of this account like a savings account, that you can invest in mutual funds, stocks, etc. The benefit, like a savings account, is there are no contribution limits (fund as much as you can) and no age you have to wait until you can use it (like 59 1/2 years old for most IRA/401k assets). These assets also could have favorable capital gains taxation instead of ordinary income and possibly could be lower during retirement, resulting in more money in your pocket and not going to taxes.

  • Social Security: If you are married, generally, I will have the highest earning spouse delay Social Security until 70. There is an 8% increase per year from your Full Retirement Age (FRA) until 70, which is a big boost to income. Generally, waiting can help protect a surviving spouse where they could receive a bump-up in their benefit. For single women, I will usually propose this as well, but many factors can dictate taking Social Security earlier. A qualified retirement income planner can help you decide what works best for you.

Healthcare Needs:

The other retirement reality of getting older is, well, health usually isn’t the best. Healthcare is expensive; thankfully, most of us will be covered by Medicare and Supplemental Plans. However, we know that healthcare could be a very large expense. Above and beyond fun expenses and expenses you need to live, make sure you factor in healthcare costs.
– Another consideration is long-term care needs. There are various ways to fund and plan for long-term care, and I always suggest having a plan in place. Insurance is a strategy to mitigate this risk with an insurance carrier, but also structuring assets and even home equity can be used to hedge this cost as well. The average cost for even in-home care can be over $60,000/year.

Legacy & Giving:

The longer we live, the more we tend to see assets appreciate bigger because income sources like Social Security and Pensions keep growing due to Cost of Living Adjustments (COLA). I’ve had numerous clients and even family members say they made more money at 85 than at 55! Due to that, having a flexible estate plan is very important. Goals and desires change, and working with an advisor and attorney can help ensure that your legacy goals are met. Which assets to leave to kids or grandkids? What is best to leave to a charity or church? And what could be donated or given away? Additionally, making sure you have the appropriate Power of Attorney (Financial and Healthcare) can be very helpful should you have diminished cognitive ability or other physical restraints that make life difficult.

Lastly, living long can be a beautiful thing.

The last thing I’d want for any client is to age and stress over finances. Hitting 90 or the century mark is something to celebrate, and thanks to healthcare advances, more and more people are. If you haven’t run a retirement income plan to age 100 and are worried about living that long, please reach out. I can make sure you are in the best shape!

Andrew Rose

Andrew Rose

Financial Advisor at Capitol Financial Solutions

 I have been very fortunate to work with hundreds of successful women who all have their own unique stories and backgrounds.  From business owners transitioning to retirement to widows trying to start a new life, I am here to be a trusted ally to help you on your journey and to alleviate the financial concerns you are wondering about.  From caregiving to career, budgeting to taxes, women take on a lot, and my hope is to partner and work together with motivated and caring women to allow them the time to focus on what really matters: family, faith, and career.