Planning for the Golden Years
Gone are the days of Betty Freidan’s Feminine Mystique. Today, 61 percent of married women bring home a paycheck compared to only 23 percent in 1959. But on average, women still earn less than men, spend less time in the workforce and receive fewer retirement benefits.
Lower Total Earnings. Women earn an average of 73 cents on every dollar a man makes.
Less Time in the Workforce. It’s usually women who leave their jobs for extended periods to care for children or ailing parents.
Fewer Benefits. A Women’s Institute for a Secure Retirement (WISER) study reported women receive only 50 percent as much pension as their male counterparts.
Considering those disadvantages and that the average woman spends more of her life single than married, it reasons you should spend a little more time thinking about retirement regardless of your age.
Life Insurance
You may believe you’re covered in the case of your husband’s untimely death because he has a life insurance policy. In essence, that is the job of life insurance. However, how much you have left over for retirement depends on the type of policy he has chosen. After medical expenses, funeral costs and outstanding debts; that may not be much. It’s wise to be involved when he is shopping life insurance. And bear in mind a $500,000 death benefit only pays out $2500 per month for 17 years—not including a retirement program or other employer-paid benefits.
Aside: Sixty-four percent of women don’t have life insurance of their own. If you have children and share a joint policy with your husband, or you’re simply counting on his death benefit, what would your children receive upon your death?
Annuities
Megan wrote an informative post about annuities, which as it turns out, is a subject avoided about as ardently as life insurance. With retirement lasting 20 plus years, some people are actually retired longer than they worked. How can you plan for such a stretch of unemployment?
Annuities might be the answer. Unlike 401(k)s and 403(b)s, the amount you can contribute to an annuity is not limited. You don’t have to stress about taxes gobbling up your savings—annuities are tax-sheltered, in contrast to social security and IRAs.
Learn more about the various types of annuities at the Insurance Information Institute (III)
Take a proactive stance when it comes to your retirement. Make plans, set goals and speak with a financial advisor. It can mean the difference between living over your son’s garage and having a beach house in Florida.
