Nearly half of women fear becoming a “bag lady” when they get older, despite the fact that 60 percent of them are the primary breadwinner in their household and 54 percent are in charge of the finances at home.
According to the 2013 Women, Money & Power Study from Allianz Life Insurance Co. of North America, 27 percent of women earning more than $200,000 a year shared the same fear.
The study, conducted with more than 2,200 women ages 25 to 75, with a minimum household income of $30,000 a year, revealed this fear extends to all corners of life and affluence and was highest among single respondents at 56 percent, but also a significant concern for 54 percent of divorced women, 47 percent of widows and 43 percent of married women. Source:
So do you have this fear, if you have perhaps you should look carefully at how much money you will actually need to continue your lifestyle in retirement?
Do you know YOUR answers to the four most important retirement planning questions?
- What rate of return risk do I have to take for my current plant to work?
- How long will I have to work before I can afford to retire?
- How much can I afford to spend and not run out?
- How much do I need to be saving to reach my desired retirement income?
It’s a mistake for married women to assume that their husbands have their financial security taken care of.
Women are much more likely than men to be focused on care giving for family members, including parents, husbands and children. Not surprisingly, then, women are much more concerned than men about the need for long-term care in their later years. Men don’t view lifelong financial security from a woman’s perspective. They may not realize that statistically a woman will outlive her spouse, which may mean that the family assets get depleted if the husband requires extended medical care before he passes.
I once met with a widow in her sixties who was left with absolutely no savings, no assets and a pile of debt. She had no way to pay her mortgage after her husband died. She had always assumed there was life insurance in place. But discovered that the husband had let it lapse four years prior to his death.
In particular, women also said they don't want to be a burden on their children for long-term care, perhaps because they themselves have experienced the substantial demands of care giving. They also don't want to impact the financial success of their children. Another reason that women express for not turning to their children for long-term care is to maintain their sense of dignity.
Sometimes single women can feel overwhelmed by the fact that their financial security is their sole responsibility. But it does not have to be like that, entirely. Resources on the topics of personal finance and retirement planning for women abound. Read books, go to seminars, talk to financial professionals. But most importantly, listen to your gut and take action. Don’t stick your head in the sand.
All women – whether single or married – would do very well to lean in to their finances. Decide that starting today you will cultivate a stronger relationship with your money.
Similarly, retirement is also the worry that keeps most women up at night. Second only to loss of spouse/significant other, “running out of money in retirement” is a worry that keeps 57 percent of women up at night and is the number one worry for single and divorced women.
So if you want to sleep at night, start to plan for your retirement, it’s never too late and, the sooner you get started the better