A recent study by Corebridge Financial indicates a disconnection between many women's envisioned retirement and their actual experiences, especially in terms of expenses. Half of the female respondents found retirement to be more costly than they had initially anticipated and nearly the same number reported retiring sooner than expected.
Financial experts caution that such premature retirement could lead to insufficient savings and compel individuals to claim Social Security ahead of time, consequently reducing their monthly payouts. Given longer life spans, women need to plan for extended retirement periods with possibly increased savings or make their money last longer.
"Women are both retiring earlier than presumed and dealing with higher than expected costs. These twin challenges underline the necessity of devising a working plan early on in their careers to not only accumulate retirement savings but also to ensure their sustainability throughout retirement," Terri Fiedler, the president of Retirement Services at Corebridge Financial, opined.
The survey showed that 63% of women wished they had begun their retirement savings earlier. More than 40% admitted that they did not start considering retirement until they were 41 or older. Granted, starting to save early for retirement can yield significant gains from compound interest, meaning there would be less need for aggressive investment later.
Almost one-third (31%) of retired women wished they had made higher contributions to their retirement plans while still working. The reliance on pensions witnessed in the past has significantly declined, with the onus shifting to individuals to secure their own retirements. A third of the retired women polled had a pension compared to only 9% of the non-retired.
“This shift in ownership mirrors a changing retirement scenario," the study concluded.