How senior women can improve retirement outlook
By Yvonne Catton
If you are a senior woman, you need to be diligent in managing your financial resources to enjoy a comfortable lifestyle in retirement. Fortunately, by planning ahead and making the right moves, you can help alleviate any inequalities that may exist between you and the men of the world.
What are some of these disparities? Here are a couple to consider:
• Longer life expectancy. Both women and men are living longer these days. But you’ve still got the edge: A woman reaching age 65 can expect to live 19.8 years, while a 65-year-old man can anticipate 16.8 years, according to the U.S. Department of Health and Human Services. And more years of life mean more expenses.
• Lower earnings. The “wage gap” between men and women has narrowed, but it hasn’t disappeared. Women who work full time still earn, on average, about 77 cents for every dollar earned by men, according to the U.S. Census Bureau. And women drop out of the work force for an average of 12 years to care for young children or aging parents, according to the Older Women’s League, a research and advocacy group. And this time away from the workforce results in more than $500,000 in lost wages.
Furthermore, there may be lifestyle issues that put greater financial pressure on senior women. For example, when it comes to giving money to their adult children, women may be more generous than men. Of course, that’s hard to prove, but according to annual surveys conducted by the Higher Education Research Institute at the University of California at Los Angeles, there has been one major, consistent disparity between the sexes over the past four decades: Approximately two-thirds of women say “helping others who are in difficulty” is an essential or very important life objective, compared to only half of the men. Thus, it seems plausible that retired women may be more committed to providing assistance to their grown children – which, of course, could lead to additional financial strains.
Taking all these factors together, it’s clear that, as retirement approaches, you need to take action. Here are a few suggestions:
• Take advantage of your retirement plan. Put in as much as you can possibly afford to your IRA and your 401(k) or other employer-sponsored plan. Every time you get a raise, try to increase the amount you contribute to your retirement plan.
• Know how much to expect from Social Security. Contact Social Security (www.ssa.gov) to make sure your earnings records are right and to find out the size of your benefits checks.
• Be aware of wills, trusts and beneficiary designations. If you are married, make sure you know what legal arrangements have been made for you to receive financial assets from your husband should you outlive him — which, statistically speaking, is likely.
• Get professional help. To identify and quantify your retirement planning goals, and to choose the mix of investments that can help you make progress toward those goals, you may well want to work with a financial professional.
And here’s one final tip: Stay informed. Whether you’re single or married, divorced or widowed, know where you stand in regard to your savings, investments and retirement plans. Your financial future is in your hands — so get a good grip on it.
Financial adviser Yvonne Catton’s Edward Jones office is at 850 Main St., Suite 104, in Ramona. She may be contacted at 760-789-2804.
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