Planning for Retirement Differently for Men: The Importance of Special Considerations
Men face several specific challenges in retirement, as highlighted by financial experts and studies. These challenges, ranging from shorter life expectancy to emotional and financial planning issues, require a thoughtful and integrated approach to retirement planning.
Health Risks and Life Expectancy
Men generally live about six years less than women and have increased rates of heart disease, stroke, and hypertension. A reluctance to attend regular medical checkups further exacerbates these health issues [2]. This combination of factors underscores the importance of integrating health and longevity considerations into financial planning.
Physical and Emotional Decline
As men age, declining hearing, vision, and energy can reduce social engagement, leading to isolation and emotional difficulties. This phenomenon, often referred to as "sensory retirement," can significantly impact retirement wellbeing [2].
Financial Behavior and Social Security
Many men claim Social Security benefits early due to concerns about not living long enough to benefit from delaying, which may reduce total retirement income [2]. This decision, driven by perceptions of health and longevity, can have long-lasting financial consequences.
Longevity Risk and Reduced Safety Nets
With people living longer, retirees—including men—need more savings to last 20 to 30 years or more. However, pensions are less common, so men must rely more on savings, but many retirees lack confidence in planning for income, drawdown strategies, and managing Medicare costs [1][4].
Addressing Retirement Challenges
To address these issues in financial planning, men should:
- Plan for longer life expectancy and longevity risk by saving more and using investment strategies that consider sequence-of-returns risk.
- Incorporate health and wellness into financial planning, recognising that health impacts both longevity and the cost of retirement (e.g., long-term care), and ensuring finances support a surviving spouse if applicable.
- Delay claiming Social Security benefits when possible to maximise monthly payments, rather than claiming early out of fear of not living long enough.
- Increase financial literacy and confidence in making retirement income decisions, such as converting assets into reliable income, tax minimisation, and understanding Medicare.
- Build a diversified retirement income plan, possibly including annuities or other products to provide steady income regardless of market fluctuations and longevity.
In summary, men can address retirement challenges through longer-term saving and investing strategies, health-aware planning, prudent Social Security claiming decisions, and improving retirement income planning skills.
The Importance of Connection and Purpose
Patrick Huey, owner and principal advisor of Victory Independent Planning, emphasises the importance of seeking advice, planning for all realities, and staying connected to others in retirement. Robert Laura, VSP Individual Vision Plans Thought Leader, warns that the physical decline men experience can have deep emotional effects, which he calls "sensory retirement." A strong sense of purpose contributes to a happier, healthier retirement.
Seeking financial help could save men hundreds of thousands of dollars over the course of their retirement, but the perception of asking for help as a sign of weakness or "unmasculine" may deter some men from doing so. Laura encourages men to rethink how they introduce themselves. Having two or three different ways to define and introduce themselves can help build a new sense of purpose.
The "Y rule of retirement" is a framework designed to address the challenges men face in retirement, including physical, emotional, and behavioural risks. It isn't about being male, but rather, being mindful and intentional when planning for a life that still feels meaningful.
[1] Wells Fargo. (2020). 2020 Retirement Study. Retrieved from https://www.wellsfargo.com/about/news/2020/2020-retirement-study.html [2] Power, J. (2021). Men and Retirement: The Y Rule of Retirement. Retrieved from https://www.powerplans.com/men-and-retirement-the-y-rule-of-retirement/ [3] UBS. (2019). The Global Investor Watch. Retrieved from https://www.ubs.com/microsites/global-investor-watch/en/report.html [4] Huey, P. (2021). Men and Retirement: Planning for a Longer Life. Retrieved from https://www.victoryindependentplanning.com/men-and-retirement-planning-for-a-longer-life/ [5] Daniels, B. (2021). Men and Retirement: The Importance of Financial Planning. Retrieved from https://www.outsourcedplanning.com/men-and-retirement-the-importance-of-financial-planning/
- Recognizing the health risks associated with increased rates of heart disease, stroke, and hypertension in men, it is crucial to incorporate health and wellness considerations into defi, especially personal-finance and mens-health planning for retirement.
- As sensory retirement, or the emotional difficulties that come with physical decline, can significantly impact retirement wellbeing, it's important to address these issues by seeking financial advice, planning for all realities, and fostering a strong sense of purpose.
- To manage longevity risk and the reduced safety nets commonly faced by retirees, men should consider delayed claiming of Social Security benefits when possible, build a diversified retirement income plan, and increase financial literacy and confidence in making retirement income decisions.
