Read on and get some ideas on why it’s important to plan for your retirement. And here also are some tips on how to get started now!
Or, “I’ll start saving for my retirement in the future” and the future never seems to happen?
Perhaps it’s “I just want the biggest paycheck now; I’m not worried about retirement.”
It’s understandable that women have not planned for retirement. That’s because the conversation about retirement has traditionally not included women. Only fifty years ago, women were financially dependent on other people. For most women, financial responsibility is a new concern. Unfortunately many of us are still NOT getting the message because women are not taking the funding of their retirement seriously and they suffer the consequences.
Let’s take a look at some disturbing facts:
- More than 80% of women DO NOT know how much income they’ll need when they retire; 72% of men DO know how much income they will need.
- The number of older women living in poverty is 50% higher than older men living in poverty.
- Women are more likely to work in part-time jobs that don’t qualify for a retirement plan.
- Social Security replaces only about 40% of a worker’s prior wages which means it won’t pay for all of our living expenses when we stop working. We live on average 19 years after we retire at age 65.
- With Social Security Reform and Medicare Modernization, the eligibility age may rise to 67 or even 70 years of age.
- With the death of a spouse, women often suffer a large drop in income.
There is more that we could list here, but this should give you a good idea of why you should be thinking about retirement now, whether you are in your 30s or 40s.
And if these facts aren’t enough to persuade you to take some action, let’s take a look at some profile stories:
- Age 73, worked part-time and let her husband handle all the finances. Now divorced. Never thought about retirement at all. Currently she relies on Social Security which is less than $1,000 per month. Insurances eat up nearly 50% of her S.S. which leaves this woman with $500.00 for food, rent, gas, etc. You do the math. If it wasn’t for the generosity of family, she couldn’t exist on $1,000 per month. She has a college degree.
- Age 68, worked full time but relies on Social Security. Went through an expensive divorce that left her without a secure retirement. Current, she lives with family and plans to continue working in order to be able to support herself. She has a college degree.
- Age 65, worked full time and now only relies on Social Security, about $1,200 per month. Only realized now that she went through her entire adult life being totally clueless about planning for retirement. She said she “only thought about the ‘NOW’ never gave any thought to what about ‘LATER’.” Never married, no children, and has a Master’s Degree.
- Age 74, worked hard at minimum wage jobs. Married in 1963 and divorced in 1995. No alimony or retirement benefits from the marriage. Throughout her whole life, she was not saving for retirement. Nobody ever spoke to her about retirement, “I always thought I would be able to work and the Social Security would take care of everything when I needed it.” At age 65, she fell and was unable to keep working. She now lives with her daughter and son-in-law and receives $684 a month from Social Security. No college.
Stories like these are all too common today. Don’t let it become your story.