Why more women will become a burden on their loved ones and what you can do to prevent it
Although poverty rates dropped from 35 percent in 1959 to 8.7 percent in 2011, a disproportionate number of those in poverty are women. Elderly women 65 years old and older outnumber elderly men in the same age bracket three to two, making poverty and aging a women’s issue. Normal transitions such as moving from married to single (through divorce or widowhood) or working to retired may thrust a person into poverty when they had successfully avoided it previously. For women, older age increases the chance of living in poverty, living singly increases that chance even more. Poverty among older women living alone was at 18.4 percent for 2011. Here are some of the reasons more women experience poverty than men.
- Women live longer. Women don’t live a lot longer but do live long enough that 85 percent of people over the age of 85 are women according to the U.S. Census Bureau. With men living to an average age of 84.3 according to the Social Security office, women’s longer lives (86.6 years) mean they need to save more (and be smarter about retirement benefits-check here for Social Security benefits for survivors). Women also often understand less about financial planning than their male partners. They reap the benefits (and suffer the consequences) of having a partner do the planning and/or not understanding the partner’s retirement benefits and how his death will affect her benefits. Many women fear stepping on their man’s toes but the time to learn from him is when he’s still warm blooded and capable of answering your questions. If you’re not currently part of the financial planning picture, make it a point to get there.
- Women die alone. I’m not saying that family won’t be there by their side but male significant others are likely to die married and women are likely to die widowed. Leading a solo life can be hard for some people accustomed to having a companion for everything from eating out to traveling to staying in. Join groups, take up hobbies or get a roommate. The other option is to learn to enjoy single life. With widows outnumbering widowers three to one, the older you are at widowhood, the smaller your chance of finding another man to share your life with. So don’t count on another man to help keep you out of financial difficulties.
- Women work lower income jobs for fewer hours and shorter periods of time. Part-time workers often don’t qualify for retirement benefits and more women than men will work at part-time hours often in order to provide unpaid care for family members (either children or parents and often both). While the days of choosing to stay at home have all but disappeared, making such a decision can hurt future employment options if you haven’t used the time to keep up your skills no matter how actively you’ve been engaged in community programs. Although women save a larger percentage of their wages, they usually have significantly smaller retirement accounts. That’s because women typically earn less money than their male counterparts (in 2009, the median income of women over the age of 65 was $15,282—roughly 59 percent of the median income of men in the same age bracket).
Lack of retirement options, lower salaries, age discrimination and less time in the work force tends to mean that women aren’t financially ready for retirement when a spouse is ready to give up the rat race and take up 18-holes of golf. Be sure and check with Social Security to find out what your benefits will be. Some applications out there can help you use spousal benefits to maximize those benefits so be aware of anything that can help you reach a higher level of benefits. Then consider whether staying in the job at least for a while longer won’t reap far more benefits than an early start to your own retirement.
If you have questions about your financial planning for retirement, contact a financial advisor. He or she can help you plot a course for a successful retirement that avoids these shoals.