10 Ways Women can Overcome Financial Pitfalls during their Retirement Years

10 Ways Women can Overcome Financial Pitfalls during their Retirement Years

Women face many challenges in retirement that are a result of roles they may have played earlier in their life. Challenges such as not working and losing out on income while raising children, if they were paid less over their careers than their male counterparts, if they didn’t have the opportunity to save and invest for the future, and/or if they unexpectedly lost a spouse and their income without replacement (i.e., life insurance, home equity, etc.). This can all come back to undermine their financial position in retirement. Women also have longer life expectancies than men and can end up spending a portion of their retirement years as a widow.

While working, women should take full advantage of pre-tax and tax-deferred saving vehicles such as 401 Ks, IRAs, and HSAs. In addition, during their family years ensure their future security with life insurance, long-term care insurance, and annuities. Fortunately, there are a number of safeguards in financial and retirement vehicles that recognize the realities women face and can help them in retirement overcome potentially debilitating shortfalls.

So, what are some ways women can overcome financial pitfalls during their retirement years?

1. Life insurance will pay a death benefit tax-free to the named beneficiary(s) if the insured passes away.

2. Social Security will pay a widow the higher benefit of their deceased spouse if they were married for 10 years or more. If divorced, they can collect on their ex-spouse’s benefit if they were married for 10 years or more and are unmarried at the time they become Social Security eligible.

3. Medicare eligibility begins at age 65 and is individual coverage that the recipient can configure to best meet their healthcare needs/budget. It can also be adjusted every year during the open enrollment period.

4. A widow can inherit their spouse’s IRA and roll it over into their own account on a tax-deferred basis.

5. The spouse of a pension-eligible worker can be named to collect survivor pension benefits for life if the pensioner passes away.

6. If a woman has served in the military or was married to a deceased veteran, they can collect the monthly VA Aid and Attendance benefit paid towards long-term care support and services.

7. The spouse of someone who is spending down income and assets to qualify for Medicaid is protected from impoverishment with an exemption for them to continue to own and live in their home, own a car, and receive income separate from their spouse.

8. The spouse of a homeowner who uses a reverse mortgage can continue to live in the house without making any loan repayments after their spouse no longer lives in the home due to death or incapacity.

9. The owner of a life insurance policy on their spouse can elect to sell the policy for a lump-sum payment based on the Life Settlement value and use the funds to pay for retirement and long-term care expenses.

10. An annuity can be set up to pay a monthly income for the remainder of the beneficiary’s life and an annuity can be set up with survivor benefits to continue making payments after a spouse dies.

It is important people realize the unique challenges women need to overcome in retirement. Taking advantage of these strategies can make a big difference.


If you want to prepare for retirement the smart way, make sure to listen to my podcast, Retirement Genius, for tips, trends, and strategies.