Women who take a career break are similarly more than twice as likely as men to return to work after retirement.
That’s based on a June survey of 1,000 U.S. residents ages 22 to 88 with wealth between $50,000 and $5 million, according to data released Friday by Charles Schwab. It is about retirement preparation and its consequences.
The data highlights that even though women are more involved in finances and investments now than in the past, they may often face certain post-retirement hurdles.
The study found that 14% of men who took time out of their careers will have to return to work after retirement, compared to 30% of women. Of those taking a career break, 70% of women said it was for parental leave, compared with just 6% of men. Also, 37% of female girlfriends said they needed child care, compared to only 4% of males who said the same. She was also almost twice as likely to miss work due to health problems as 23% of women and her 12% of men.
Those who took time off from work (39%) were more likely to start saving for retirement in their 30s than those who didn’t (27%).
Susan Hirschman, director of wealth management at Schwab Wealth Advisory and Wealth Advisory, said planning well in advance can help those who anticipate needing to take time off work for an extended period of time. Ta. Schwab Center for Financial Studies. And meeting with an advisor is important because business people are well aware that a one-size-fits-all plan is far from ideal.
“What we always like to share with people is that what’s good for your neighbor isn’t necessarily right for you,” Hirschman said. “Everyone has different goals, lifestyles, and savings habits, and those things come into play.”
Participating in financial planning is important for women, especially those who leave work to raise children, she says.
“The most important thing, I would say, is to take an active part in your wealth,” she said. “Consider that the wealth you earn through your spouse is also yours, and you are responsible for making sure your investments and savings align with both goals.”
That means, among other things, participating in planning discussions to address things like life expectancy and risk tolerance.
Job satisfaction is also a consideration. The survey found that nearly one-third of those who took off retirement had returned to work in the same field (many part-time), but some of the main reasons for returning to work were income and It doesn’t matter, it’s work, purpose, boredom.
“They get to pickleball five times a week and it gets old,” Hirschman said. “It depends on what you need to feel fulfilled.”
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Alexis Zuccaro, Wealth Advisor at Sageview Advisory Group, said: “Overall, female clients in particular, whether single or married, are overwhelmingly more involved in their finances. It’s like that,” he said.
“When they aspire to a career, they plan for that career and the family they want to have with that career,” she says. “The next logical step is to work with financial advisors much earlier than we have in the past.”
One of the best steps for young workers is to contribute as much as they can to their 401(k), at least enough to be matched with a full employer, and six months of living expenses. Make sure you have enough emergency savings to cover it, Zuccaro said. It’s also important that he incrementally increases his 401(k) contributions when he gets a raise.
Returning to work after a period of time off may need to reflect “the need or desire to make up for lost savings,” she says.
Advisors are typically willing to consult long before they have enough money to become clients, Mr. Zuccaro said.
“Some people think you need to hide a lot of money to see a professional,” she says. “Never be afraid to reach out.”
