PLANNING FOR A LONG LIFE
WOMEN & RETIREMENT - GOOD NEWS, AND SOME NOT SO GOOD NEWS
Time...to curl up with good book, uninterrupted by a deadline or must-do projects. Freedom...to for trips to see the kids, help out at the community bazaar, or make spur-of-the-moment decisions to extend those getaway weekends another couple of days. Peace of mind...to snuggle on the couch 'til midnight watching your favorite movies, not worrying about answering an alarm clock's call at the crack of dawn.
Heaven? No. Just retirement. If you're a woman looking forward to enjoying a peaceful, comfortable retirement someday, you're not alone. By age 65, five out of six people have hung up the briefcase or tool belt and retired.
Now for the other side: Women may have to put in more effort before they get to enjoy a worry-free, financially secure retirement.
One reason is the "longevity factor." Women on average outlive men by five and a half years -- 73.9 for men versus 79.4 for women, according to the National Center for Health Statistics. Plus, by the time they are 65, nearly half (45%) of all women are widows. That means they're likely to spend their final years alone.
Plus, most women have fewer retirement resources. Elderly women get more than half their total retirement income from Social Security, with their total median income coming at less than $1,000 a month ($11,611 a year), according to the report, "Women and Retirement Security," issued by National Economic Council. This is due in part to the fact that more than six out of every 10 women working today do not have a pension plan, while three-quarters of all retired women today receive no pension benefits, which is why it is no wonder 67% of women fear that their savings will run out before they die.
These factors very likely will have a dramatic impact on your lifestyle and standard of living in your senior years. It doesn't matter whether you are married or single; whether you are young and just starting out or so close to retirement that you can almost read the headlines as you dream about leisurely Monday mornings with the paper in bed.
You will in all likelihood need more retirement income than you thought...and you are the one who must make sure it is there. How much will you need? That depends on a number of factors.
One scenario: Let's say you'll need $100,000 a year in today's dollars at retirement. Let's further assume that you will live five years longer than a man who is the same age as you. That means you will need an additional $500,000 in income! Some may come from Social Security; some may come from a pension. But you may need to make up the shortfall yourself...or run the risk of spending your retirement years struggling financially.
Recommendation: Plan for a long life:
If possible, make maximum contributions to qualified plans through work. Sacrifice in other areas if necessary.
If you are married, help your husband understand your concerns about your financial future if you outlive him.
Make little sacrifices today to help lock in the retirement lifestyle and security you want tomorrow. This will help assure that your retirement years are in fact your golden years -- safe, secure, free of financial worry.
Get good advice. There is no need to go it alone. If you would alike assistance, contact my office for information and ideas.
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I get tremendous gratification from encouraging people to focus clearly on their future final success and security.
Larry Brasel, President