Women Face High Risk of Outliving Their Money

Here's some bad news for men: We don't live as long as women. But there's bad news for women, too: you might live too long--financially speaking.

Women face a greater longevity risk--the danger of outliving their assets and experiencing poverty in old age. The average life expectancy for a 65-year-old American woman is 20 years, or 85 years of age--three years more than a man. And those figures are just averages, which means many women will live well beyond 85.

But longevity isn't the only factor at work here. Our retirement benefits system is tied closely to the amounts we earn during our working lives--and here, men continue to be far ahead. The non-profit Women's Institute for a Secure Retirement (WISER) offers the following statistics:

• Women work at paid jobs an average of 12 years less than men do over their lifetimes due to family care giving responsibilities. Fewer work years translates to fewer years saving or participating in an employment-based retirement program. It also means lower Social Security benefits.
• Women earn 78 cents for every dollar earned by men.
• Less than one-third of retired women today receive pension income. And less than half of today's working women have access to a pension or retirement savings plan through their jobs.

As a result, nearly 40 percent of older women living alone depend on Social Security for almost all of their income and more than half would be living in poverty were it not for their Social Security benefits. In 2007, 20.5 percent of unmarried women age 65 and older had income below 100 percent of the federal government's definition of poverty-far higher than rates experienced by men or married couples, according to Census Bureau data.

WISER's director, Cindy Hounsell, has been working for more than 10 years to draw attention to the general problem of retirement security for women. Recently, she has been trying to turn up the volume on one particular question: how to get more guaranteed income for women in retirement.

"The discussion usually focuses on the accumulation of retirement assets," she says. "Retirement experts tell us to save enough to pay our costs over our life expectancy--but we don't need life expectancy income. We need lifetime income."

Read the full story at RetirementRevised.com.

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Comments

[pachel]

This is a topic everyone should pay attention to as we are all connected and have relatives. Life is so messy. You can do everything "right" your whole life and still stuff happens.

[americaforme]

Instead of moving forward, senior women are slipping into serious poverty. In the fiftys elderly women who survived many years after husband died, couldn't make ends meet. Women in their eightys didn't have their needs met, and the social programs scant. It was so sad, to see them all huddled up in bus stops, reading rooms,and other public places. No one wanted them around, this reality was too hard to take. Unfortunatly we are going back to this horrible injustice, medicine, Doctors,mail box credit cards, energy. Women may find it tougher, than the fiftys. Children have sucked up all the rainy day money, and they cant count on being take in. Solutions may be (Solient Green) better than dying on the streets.

[jeffrey678]

The federal Government should have government pension option for people saving for retirement. I trust the Federal government more that Wall Street.

[greyhound2]

A big problem exists for women in the future. In the baby-boom generation, the divorce rate as gone from less than 10% to over 60% and 85% on second marriages. Women have filed about 90% of those divorces. The baby-boom generation is now moving into retirement age.

Their problem is that most do not have enough quarters (40 or ten years) to qualify for social security and have depended on half from a deceased husband to survive. Now single, these same women don't have somebody to support them and don't have any social security to count on.

Expect a loud outcry from women for support from the government. The reality is that maybe they should have thought about that before you showing up on the courthouse steps.

[Indra]

There is an investment strategy that answers to the aforementioned problem. Younger women should marry rich men. When these rich men die, it gives an opportunity for younger men to marry the newly rich widow and thus gain wealth so that they can become rich guys when the older wife dies. This then gives rise to another young woman to marry a rich man. This is so simple. Diamonds are a girls best friend.

[dadw5boys]

Women without College degrees can work all their life and still have little to show for it.

Lot of kids out there are getting hit with momma needing financial help just to survive espically the way credit card companys have been abusing the elderly.