Why Women Live Longer—and What That Means for Retirement Planning

It’s a well-known fact: women, on average, live longer than men. In Australia, the average life expectancy for women is around 85 years, compared to 81 years for men (Australian Bureau of Statistics, 2023). 1 While longevity is a gift, it also presents a financial challenge—how do you ensure your retirement savings last as long as you do? 

Traditional retirement planning doesn’t always account for the specific financial needs of women, who may spend more years in retirement, often with a smaller superannuation balance due to career breaks or part-time work. Planning ahead is essential to maintaining financial security and independence in your later years. 

Longevity and the Retirement Gap 

Longer life expectancy means women need to stretch their retirement savings over more years. However, many women retire with significantly less super than men due to the gender pay gap, unpaid caregiving responsibilities, and time out of the workforce. This discrepancy can make a comfortable retirement more difficult to achieve without proper planning. 

Research from the Association of Superannuation Funds of Australia (ASFA, 2022) shows that women retire with an average of 25-30% less super than men, highlighting the importance of early financial planning. 

Key Considerations for Women Planning Retirement: 

• Longer Retirement, More Savings Required The longer you live, the more you need to cover living expenses, healthcare, and aged care. Ensuring your super and investments are structured for long-term growth is critical. 

• Healthcare and Aged Care Costs Women often face higher healthcare costs in later years, with increasing needs for medical treatments, home care, or aged care facilities. 

• Inflation and Rising Living Costs The cost of living continues to rise, and retirement plans must factor in inflation to maintain purchasing power over decades. 

Strategies for Women to Plan for a Longer Retirement 

1. Start Investing and Saving Early 
   The earlier you begin building your retirement nest egg, the better. Compound growth over time can significantly boost your savings. 

2. Boost Your Super Contributions 
   Consider making extra contributions to superannuation where possible, including salary sacrificing or making voluntary after-tax contributions. Government co-contributions and spousal contributions can also help bridge the gap. 

3. Ensure Your Investments Support Longevity 
   A diversified portfolio with a mix of growth and defensive assets can help sustain long-term income. Consider investments that generate passive income to supplement super withdrawals. 

4. Plan for Rising Healthcare and Aged Care Costs 
   Set aside funds specifically for medical and aged care expenses. Understanding your options for home care packages or residential aged care funding can help you prepare. 

5. Adopt a Sustainable Withdrawal Strategy 
   Drawing too much from your super too soon can leave you short in later years. Work with a financial adviser to set up a sustainable spending plan that adapts to market conditions and lifestyle changes. 

6. Consider Longevity Protection Products 
   Some retirement income solutions, like annuities, can provide guaranteed income for life, ensuring you don’t outlive your savings. 

7. Stay Financially Engaged 
   Women who take an active role in managing their finances and investments tend to have better retirement outcomes. Financial education and ongoing advice can make a significant difference in long-term wealth. 

Final Thoughts 

Longevity is a wonderful advantage, but it requires proactive financial planning. Women need to ensure their retirement savings last, cover rising costs, and provide financial security for decades. By taking steps today to strengthen your financial future, you can embrace your later years with confidence and independence. 

If you’d like to create a personalised plan to ensure your retirement funds last as long as you do, we’re here to help. Reach out to us for expert guidance on securing a comfortable and financially secured future. 

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References: 

1 Australian Bureau of Statistics. (2023). Life Expectancy in Australia. Retrieved from https://www.abs.gov.au/statistics/people/population/life-expectancy/latest-release  

2 Association of Superannuation Funds of Australia (ASFA, 2022). Retirement Standard Report. Retrieved from https://www.superannuation.asn.au/media-release/statement-from-asfa-ceo-mary-delahunty-women-asked-yet-again-to-sacrifice-retirement-savings-under-latest-proposal/  

Your Vision Financial Solutions Pty Ltd ABN 64 650 296 478 and its Advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. This article has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this article you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.