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