Invest Retirement

Ladies, How Much Is Really Enough for Retirement?

HerMoney Staff  |  June 23, 2022

Outlasting our savings is a real concern for women across the country. But it doesn’t have to be. With some planning and preparation, you can protect yourself and have enough income to live the life you want. 

When it comes to saving money and accumulating wealth, research shows women know what to do. We’ve got this. But making our money last for as long as we need it to… well, not so much. Outliving our savings is a real concern for women across the country. And for good reason. Data shows we can easily live well into our 90s and beyond. And while that kind of life expectancy is a wonderful thing, it also requires us to amass a lot of cash and protected income that we can’t outlive.    

“Women have more to lose because they are more likely to live longer, and they traditionally get paid less than their male counterparts. Therefore, they need to stretch their retirement income further,” says Jean Statler, CEO of the Alliance for Lifetime Income. “It magnifies the risk and possibility of running out of money.”

“Women have more to lose because they are more likely to live longer, and they traditionally get paid less than their male counterparts. Therefore, they need to stretch their retirement income further,” Jean Statler, CEO of the Alliance for Lifetime Income

Outliving our savings is a scary proposition, but thankfully it doesn’t have to be something that keeps us up at night. There are steps you can take now to prepare for the road ahead, whether you’re making money, growing your money, or saving to make it last. 


If you’re in your 20s, 30s or 40s and haven’t started saving for your retirement, now is the time. The sooner you begin putting money away, the larger your pot will grow. “You should be really focused on saving as much money as you can,” says retirement expert Anne Lester. “That’s the one thing you need to do.” 

To determine how much income you’ll actually need, consider your current lifestyle and what you think your expenses will be like in retirement or next chapter of life. Think about your savings in two buckets – your must-have money and your lifestyle money. First focus on those basic costs you have to pay for and can’t live without such as housing, food, utilities, and healthcare. Whatever that number, devise a plan that produces enough protected lifetime income (guaranteed income from Social Security, a pension if you’re lucky to have one, or an annuity) to cover those basic expenses so you have the peace of mind, never worrying about those essential expenses you must pay for. As you calculate your costs, make sure you consider inflation and your always- evolving life goals. Money from everything else you save and invest can go towards doing all of the fun things like traveling, entertainment, and living the life you want. HerMoney’s partner, the Alliance for Lifetime Income, has simple but powerful tools and guides to help you figure out if you’ll have enough money to cover your basics.

Once you understand your retirement number, it can be easier to spot when you might be falling short, and take steps to correct the situation by saving more or working longer. Online calculators can help, but the main thing you need to do is to start saving. “My advice in your 20s, 30s and 40s is getting to a 10% to 15% savings rate,” says Lester. “If you’re doing that, then check back in when you are in your 50s. You’re probably fine.”  

Accumulating money for retirement is made easier if you work for an employer that offers tax-advantaged retirement savings plans such as a 401(k). If it’s available, use it. If the employer matches a percentage of your contribution, make sure you are saving enough to capture all of that match. If not, you’re leaving free money on the table. If you don’t have access to an employer-sponsored retirement savings plan, then start saving on your own. An IRA is a tax-smart way to sock away money for retirement. Even saving $50 per paycheck if you’re cash strapped is better than saving nothing.


Once you have an idea of how much you’ll need in retirement, it’s time to put your assets to work by understanding your risk tolerance, time horizon and portfolio allocation. Your investment portfolio should be diversified, made up of a mix of stocks and bonds. Exactly how much of each depends on how long you have until retirement and how much risk you can withstand.  If you have many years to go, you can take more risk, which means your portfolio may be more heavily weighted toward stocks and other high-growth asset classes. 

If you need to dial down the risk because you are in the preservation phase, your portfolio should reflect that.  “There are so many different investment options, it’s not simply black and white,” says Chelsea Lobato, Vice President, Branch Manager at Charles Schwab. This is where a trusted certified financial planner can come in. He or she can help you create a road map to your future considering your short and long-term goals and how you feel about investing. A CFP can also help you keep emotions in check when the markets tank and get you back on course when your portfolio goes sideways. 


Translating today’s earnings into something you can one day spend involves buying stocks and bonds to generate income and then selling them over time. But that latter action can be complicated and intimidating. One way to take the guesswork out of your financial future is to add a stream of protected lifetime income to the mix with an annuity, to help cover the guaranteed income gap left by Social Security. Understand that Social Security, which is a form of protected income, only covers about 40% of your pre-retirement income. The money in an annuity would grow on a  tax-deferred basis, and come retirement time, you’d get a regular fixed payout throughout your lifetime, that’s adjusted for inflation if you select that as an option to your annuity. “Let’s say you have $1 million and your Social Security payout is $30,000 a year. You can take a portion of that $1 million and convert it into lifetime income and you’ll know for sure you have money every month,” says Lester. “It gives you permission to spend money, and can also allow you to take a little more risk in your investment portfolio.”

After all, it’s not crazy to think you’ll live until you’re 105 and what better way than knowing you’ll have guaranteed money coming in each month. Even if everything in your financial life goes terribly wrong, you’ll be able to keep the lights on, pay your bills, and stay in the house, says Lester.  


Social Security is an important stream of income that retirees rely on, which is why maxing it out is important. The rule of thumb is the longer you wait to start collecting your monthly benefit, the greater your check will be. That’s because you’ll receive retirement credits every month you delay taking social security until you reach the age of 70, giving you growth of about 8% on your money from age 62 to age 70. And with women living well into their 80s and 90s, delaying taking this benefit for as long as you possibly can tends to make sense. Always talk to a financial professional to make sure you’re making the best move for your situation. 

At the end of the day, the single most important thing you can do to prepare for retirement is make a plan. “Right now it may not feel good to save,” says Lester, adding that there are always many trips we want to take or things we want to buy. “But you’ll be very happy you did.” 


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