Women at Greater Retirement Risk

A recent study by the Women’s Institute for a Secure Retirement (WISER), Urban Institute and the Society of Actuaries, found that women continue to face greater financial risk for retirement than men. With nearly 40 million women reaching retirement age over the next 20 years, planning for retirement needs and accumulating the necessary assets to pay for those needs has never been more important.

According to the study, factors occurring throughout women’s working lives often affect their ability to save and build assets. Some factors are:

• Despite advances in the workplace, women continue to earn on average 76 cents for every dollar men earn. Median income for women in 2011 was $36,500 as compared to $48,000 for men, with amounts decreasing by age. Nearly half of all women (44.8 percent) work in jobs without retirement plans or 401(k)s. Women are also more likely than men to work only part-time, which generally means lower wages and fewer benefits.
• Women at age 65 are expected to live 20 more years, on average – two years longer than the average for men.
• Women report an average of 13 years out of the workforce, often caring for family. Over their lifetime, women spend an average of 680 hours per year providing care, 160 more hours on average than male caregivers.

While women historically may have relied on their spouse to accumulate wealth to see the couple through retirement years, for most those days have passed. According to the Department of Labor, almost 90 percent of adult women will manage their finances alone at some point in their lives. Beyond saving for retirement years, women should learn early to manage their finances and ensure they understand their finances at any stage of life, even if their spouse actively manages the family money.

Make sure the women you care about – regardless of their age – have the knowledge they need to be financially prepared. You can count on your financial adviser to always be available to answer your questions or to speak with someone you know that could benefit from our financial experience and knowledge.

FINANCIAL FACTS

Which Average? – The S&P 500 was up 20.6% for the 12 months ending June 30, 2013. The index was up 7.3% per year for the 10 years ending on the same date. The index was up 4.2% per year for the 15 years ending on the same date. The index was up 8.7% per year for the 20 years ending on the same date. All numbers are total return performance results including the impact of reinvested dividends (source: BTN Research).    

The Value Of Education – The median net worth of American families headed by a person that received a college degree is 3.4 times as large as the median net worth of American families headed by a person that received only a high school diploma (source: Federal Reserve, BTN Research).