By Kim Kirmmse Toth
Ladies, please do not take these reasons lightly. They are not for the faint of heart. However, they are extremely important. There are a great many articles on this subject, but here are 10 reasons in a nutshell for you to pay attention to NOW!
1. Take control of your future. You will most likely be the surviving spouse. Or you may be divorced and single. Or you have always been single. Whichever is your reason, you are on your own. Do not wait for Prince Charming to come and whisk you away on his white horse. What if he never shows up? If you are the surviving spouse, were you part of the financial planning? You should be. This is YOUR life, and you need to take control of it. No one can predict the future, but wishing, hoping, and praying that it will all work out is naïve and will land you in big trouble.
2. Don’t scoff at working women. Women tend to spend less time in the workforce. The average woman spends 15 years away (raising children, caring for elderly parents), while the average man will be away for 1.6 years.
This means women have lower benefits from company pensions, 401(k) plans, and Social Security.
It appears women are “punished” for raising children and caring for elders. Remember, no wages equals no credits equals no Social Security. Our system is not kind to women.
3. Keep a keen eye on your income, savings, and spending habits. Of all the elderly persons with income levels below the poverty line, more than 70% are women. If married, more than half were much better off financially before their husbands died.
4. Make health benefits a priority. Many women need to pay out of pocket for health insurance benefits. This may be due to spending less time in the workforce. Whatever the reason, it can be devastating to be without health insurance coverage.
5. Defer your Social Security benefits as long as possible. Women need to wait as long as possible to collect Social Security benefits. At this time, 60% of women choose to apply for Social Security at the earliest age possible (62 years).
Keep in mind that your Social Security retirement benefits are based on your 35 years of highest earnings. (If you don’t have 35 years of employment, they use a zero for each year without earnings. Working an extra year or two allows you to replace years lost, which increases your benefits.
If you go to www.socialsecurity.gov/planners, you can calculate different retirement scenarios.
6. Hire a financial advisor. As much as you love to do things on your own and make important decisions by yourselves, this is a time to hand it over to an expert. Unless you have many extra hours to spend learning the intricacies of the market, you will only be hurting yourself and your future. It’s a good time to ask for help.
Ask your family and friends for someone they trust that has done well by them. For most of you, this is a task you need to let go of.
7. Working longer than you anticipated may be the key. Women may need to work longer to achieve a stable, livable retirement. One half of working women do not have access to pensions or company retirement plans. Many women don’t earn enough to save in order to fund their retirement. The truth continues to be that women working full time still only earn 76% of what men earn.
8. Baby boomer women are the most educated in history, but . . they are more likely to be divorced or never married than women in other generations. That in itself requires women to work more years. Although baby boomer women have more education and stronger workforce participation than earlier generations, being divorced or never married may create a deficit in retirement income.
9. Don’t count on your home equity. Planning on converting the equity in your home into retirement income could backfire on you. Housing values are not always stable and tend to either level off or decline. Although equity in your home may add to your nest egg, don’t make it your primary funding source.
10. Be healthy minded NOW. Keep on top of your health now, not later. Exercise, eat well, and get all the necessary annual medical checkups you need. How you take care of yourself now may be the crystal ball of your future.
According to AARP, 62% of women in the country do not have long-term retirement plans. Don’t let this be you! Policy makers have ignored the needs of baby boomer women and largely ignored the plight they are in when approaching retirement. This is true primarily for those without enough resources to fund their third age.
Published October 21, 2008
Kim Kirmmse Toth
Positive Aging Inc.
Transitions and retirement expert Kim Kirmmse Toth, LCSW, ACC, founder of www.myretirementbydesign.com, coaches, speaks, and writes for baby boomers on the joys and challenges of creating a third age that fits your desires and dreams. You may contact her at kim@positiveaginginc.com or 720-922-1201.
This information is useful and timely for me. I can ofically retire in a month with full benefits. Instead, I have to keep working because after 36 years of marriage he decides he wants to be with someone younger. The divorce settlement was unfair. He made out like a bandit. So when we should be retiring together, I have to continue to work and struggle to pay for my “new” life. I get non of his retirement benefits. By the way, he never stayed home when any of our three children were sick. He is doing quite well in his new life without me. He is retiring this summer and already has a new job. He is also having a home built in another town. This life is draining my life’s blood. This is not what I signed up for.
Excellent ideas Kim. Perhaps you would be interested in some of the recent ideas about how women should approach this event that I recently posted on my blog: http://retirementwithaplan.wordpress.com/
In it, I look at the necessity for retirement coordination rather than looking at this as a “I-am-in-it-alone proposition”. Open communication and the alignment of with what your significant other is doing with their plan can be incredibly helpful in securing a better-than-adequate retirement.