Retirement for women is dissimilar than for men, and unless this fact is recognized and acknowledged, a woman's relinquishment may come to be something less than golden. My intent in this article, based on 28 years of palpate in the financial services industry, is to discuss what women can, even must do, to assure their years in relinquishment are some of the best years of their lives.
There are many reasons for women living in poverty during their 'Golden Years'. Below are some you may recognize, and suggestions and solutions you may wish to consider.
Hood
Problem #1: Many women rely too heavily on their spouse
For revenue during the working years, for pension and public security benefits during retirement, and for ongoing financial advice and advice throughout the years, with unforeseen and tragic results in many cases. (3 of every 5 elderly women face relinquishment without a husband).
Problem #2: Work Patterns
Women often have irregular work patterns, due to marriage, children, care giving and other responsibilities. This often leads to women not earning full pension benefits, or any benefits at all.
*Only 32% of retired women who have worked in the underground sector had pension benefits, whereas well over half of men received them. *U.S. Census Bureau
Even when women do earn pensions, their benefits tend to be a fraction of what men receive because of their lower revenue and involved vesting schedules that penalize them for keen in and out of the workforce. For these reasons men's pensions tend to be upwards of two and a half times that of women.
Problem #3: separation
In all too many cases a separation occurs, sometimes even later in life, and the financially new woman is set adrift in unknown waters. Often times the assets are divided in what appears at first perceive to be equal, but the woman's share may contain the house home with a hefty mortgage payment, while the husband gets the pension and 401k plan, assets that will serve him well during his relinquishment years.
In addition, the ex-husbands revenue is not disturbed, while the woman's revenue may be dependent on temporary alimony and/or child support. Anything revenue she is able to create by going back to work, often with puny or no job skills and being out of the work force for many years, brings lower pay, therefore lower time to come pension and public security benefits.
Problem #4: Widowhood
Upon the husbands death the pension often ceases and public security benefits normally decrease, putting the widow in a financial bind.
One-third of women who come to be widowed are younger than 60. Half of all women who come to be widowed are younger than 63.
Widowhood can severely jeopardize a woman's economic prospects. Elderly widows receive, on average, only ,964 a year in public security benefits as compared to an midpoint of ,580 for the joint public security advantage received by a married couple.
Only 21 percent of widows receive survivor pensions based on their husbands' benefits.
Of those who do receive a benefit, half receive less than ,800 per year.
According to the *U.S. Census Bureau, 80% of women live longer than their spouses and often by many years -- 14 years on average. The risk here is if she tries to sound her current living standards she may deplete her savings over time. As health expenses or long term care needs arise she may be forced to reduce her appropriate of living, or spend down assets in order to get assistance. Neither of those choices bode well for her ability of life.
*U.S. Census Bureau
Solutions, Recommendations and Strategies
First, educate yourself about the house finances. Make sure you have a good overview and comprehension of what assets are owned, how they are titled, who the beneficiaries are, etc. get ready yourself to manage your own finances, as the odds say you will need to do just that at some point. Make sure you are named on all house accounts as owner, co-owner, or beneficiary. This establishes your legal right to these assets should the marriage end in divorce, death, or even if your partner becomes incapacitated.
Next, build what I call the Three-legged Stool of Lifetime Financial Security:
1) Inflation protected lifetime income
2) Growth/income investments for time to come needs
3) Long term care security in the form of assets or insurance, or some combination of both
Some of the solutions to ensure your lifetime security could consist of:
1) your public security relinquishment benefit
2) a secondary inflation adjusted revenue you can't outlive
3) a prudently managed growth/income inventory to keep pace with the cost of living
4) a creative and flexible recipe of protecting your inherent long term care needs
5) time tested strategies of ensuring you pay no more than your fair share of taxes
Last but not least, seek out the aid of an independent, experienced financial advisor, preferably one who is compensated by fee for service, much like an attorney or tax accountant. This would rule out the commission driven advisors, where there is a unavoidable disagreement of interest.
Many of my clients are single, mature women, so I have been a seek to what they have experienced straight through my 28 years of advising and guiding them. My palpate in working with them has given me comprehension into their unique needs, and has maybe grand me to good serve them, both during their working years, and throughout their relinquishment years as well.
Why Many Retired Women Live in Poverty - And What You Can do to prevent It