Month: February 2018

The financial picture for women today has changed significantly since 1950. Women’s participation in the labor force rose from 33.9 percent in 1950 to 57 percent in 2014. And the number of women 55+ who are working has seen a particularly large increase, starting in the year 2000. Many women work because they wish to, and plan to pursue careers their whole lives. But for older women, the picture is different. When a woman loses her spouse or partner, she also loses much of her resources.

The need for help with finances is especially critical for older women. When a senior woman becomes single through death or divorce, her expenses aren’t cut in half. Actually, they are only decreased by about one-fourth to one-third. At the same time, when you crunch the numbers, her resources decrease by 37 to over fifty percent. The big ticket items are still there – housing, car expenses, insurance and taxes, but the cash flow is severely compromised. Where does she turn for help?

 Main reasons for problem

These facts usually come as a surprise to the newly single female. Her understanding of money matters is probably small. Older women have very little financial information. Earning and saving was something men managed. They were the primary bread winners and her work patterns were considerably less. Here are some facts to consider:

• Women took time out to care for children or family members needing help.
• Women’s pay was – and still is – less than men’s.
• Women rarely had jobs with pensions.
• Women’s savings were considerably less.

When a couple both retire, there are usually two social security checks and possibly a husband’s pension. Investment funds provide a foundation for a secure future. That may be jeopardized if there are health expenses not covered by insurance, or they don’t watch their budget. If the husband predeceases his wife, she will have less going forward than anticipated. If his pension stops with his death, which is usually the case, her finances are severely compromised. Pensions are retirement benefits, not death benefits.

The result of these disparities is that today, one in four older single women lives below the poverty line. Where does she go for help?

What the experts say

Today in America, only one-third of women sixty-five or older is married. So there are millions of single women needing help. Fortunately, the financial world is gradually becoming aware of the facts. Magazines, articles and studies address the subject regularly, often as a warning, and sometimes with concrete suggestions for fixing it. Government publications and websites are informing readers that this problem will only get worse if no changes are made.

The time to help women, of course, is before they retire. Ideally young boys and girls would both be taught about money matters. Children should grow up understanding the basic facts of earning and saving. The increase of females in the job market is only going to grow, and her financial plan should be individualized to her needs and goals. Joint plans can co-exist alongside a couple’s individual investments.

Fixing your money crunch

If you are nearing retirement, carefully go over all your assets. This doesn’t just mean your checking account and an IRA or 401k. Take a little time and determine the value of everything you own. Most likely there are items you no longer need or want. Pieces of furniture, pottery, glassware, or sports equipment can be sold online or by household sale. It may not seem like much, but you can increase your cash flow this way until you figure out a more permanent solution.

If a couple has a financial planner, that person should see to the needs and goals of each person individually, as well as a couple. Women need to know how much they will have, where it is (what kind of investment), and how it should be handled. According to the Department of Labor US government, “44 percent of people who tried to figure out their financial futures ended up changing their retirement plans.”

Today there are classes and tutorials on every aspect of planning and investing. Community classes, online webinars or e-books and informational investment gatherings will educate you on finance. You also may be able to get help for personal questions and situations. The best option is to ask knowledgeable people, and keep asking until you get the information you need. This includes asking your spouse, who may want to simply assure you that everything is in order. Women need to know the specifics.

After retirement

Let’s say you planned for your retirement, with or without a partner. Funds were adequate for you to live the way you wanted at this time of life. But life can throw a monkey wrench into the best of plans. Your finances begin to dwindle too rapidly, you find yourself single and you don’t trust anyone. HELP!

If you know someone who seems to have a good grasp of their own finances, have a talk. Get a reference or two from friends who are pleased with their investment planners. Research ways to bring in some money. There are many options available and the internet is loaded with ideas. Really think carefully about what you would be comfortable doing and make a chart or keep clear notes.

At the end of the day

The numbers can be crunched again and again. See what makes sense for you. Financial firms have tests you can take to calculate your needs and possibilities. It should be a beginning, not a final decision, but you can compile information and look for common ground. You may want to try something and see how it works for you. It’s ok to be an explorer. The good thing about being in the older generation is that we can lean on our years of experience. Experts consider this a clear asset for seniors starting businesses.

Only you can make your golden years “golden.” It’s your time in life to kick up your heels and just enjoy. Don’t forget to have fun.

Share your story or leave a comment. I’d love to hear from you.