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Old age has specific implications for women as they often outlive men, devote less time in the workforce and participate in less-paid jobs.

By 2050, around 25% of the population in OECD countries and 17% of the global population would be over 65 years of age, but only 24.8% of individuals globally save for their old age. India is not an exception to this trend. By 2050, the number of people aged 60 and above is expected to be about 315 million.

Across the globe, mostly men undertake the task of financial management and deal with financial planning, including planning for retirement. Women’s financial planning receives very little attention. Let us discuss retirement planning and how to successfully plan and execute the same more from the woman’s perspective.

What is retirement planning?
Retirement planning refers to preparation for the time when a person would leave the workforce and work-related income would cease to exist. It is a strategy to establish a balance between current expenditure and savings to ensure a financially secured retirement. Retirement financial planning is vital for a smooth transition, adjustment, and success during retirement.

Why focus on women?
Today, more women are participating in the workforce. Further, old age has specific implications for women as they often outlive men, devote less time in the workforce due to their caregiving roles, usually participate in part-time jobs/less-paid jobs/service positions that are not covered under pension plans, avail fewer pension benefits and lower wages due to gender differences, etc., which cannot support them financially in their old age.

Financial planning for women
One should start investing from the very beginning of one’s earning career. As financial planning is a long journey, before embarking on it, everyone should purchase adequate health insurance and a suitable life insurance policy. One may be young, but ill health and risk could happen at any point in time. Apart from adequate insurance, it is also essential to build an emergency fund which should be equal to six months of your take-home salary. Once you are done with these basics, then start investing.

Suitable financial products
At a younger age generally, financial commitments are less and risk appetite is more. In such a scenario, one could be better off by investing in preferably equity-based mutual funds through systematic investment plans. This will help in achieving long-term goals such as financial security post-retirement, buying a house, etc. Upon reaching the second phase of the life cycle such as marriage and becoming a mother, women look for certain other products such as highly rated non-convertible bonds, debt-oriented mutual funds, Public Provident Fund, National Pension Scheme, etc.

Improving financial planning by women
Many empirical studies carried out in India reveal that young women are less active in retirement planning. The studies cite reasons such as lack of experience in investing, choosing among the range of financial products, depending on the spouse, etc. Thus, young women should be considered a separate niche market, and financial advisors should provide step-by-step guidance and encourage them to start financial planning early.

To conclude, the earlier culture of keeping financial discussions and responsibility for investment decisions restricted to male members of the family is slowly fading away and working women should seriously do their own financial planning.