Women who are over 50 face an interesting dilemma as we approach retirement in that we’re often ill-equipped to navigate financial matters. We grew up at a time when many women did not work outside the home and if they did, it most likely was not a high-paying career. Husbands managed financial matters and their retirement plans, or the lack thereof, determined our late life financial well-being. Our lack of financial preparation for retirement is reinforced by studies that show that today only one-third of women of all ages are planning and saving for retirement. We’re not as prepared as men for this phase of life.
Some women feel confident that because in addition to their Social Security check their husbands have a decent Social Security income and pension, they’ll be in good shape in retirement. However, women tend to outlive men and if widowed, they’ll only receive one of the Social Security checks (the higher of the two). In some cases, company pensions are discontinued or significantly reduced when the husband dies.
Women who are divorced (and there are twice as many divorced women over 50 than there was 20 years ago) face challenges in that they’ll need to cover expenses on one salary and/or pension. Women going through a divorce need to factor this in and assure that retirement savings and pensions are considered when assets are split.
The reality is that we need to take an active role in our retirement planning long before we are approaching that age. If married, know your financial realities, such as assets, debts, retirement plans, and expected income and expenses for that season of life. If single, know your financial realities and save! Whereas it is advised that men save 10% of their annual income every year for retirement, because women usually earn less, a bigger hunk of income may need to be saved. Also, keep in mind that although you’ll qualify for Social Security benefits at age 62, the longer you wait to receive them, the more you’ll receive. (You reach your maximum benefit at age 70.)
Lastly, advise your daughters and granddaughters to take an active role in creating their financial well-being.