Women & Retirement
NEVER TOO LATE TO PLAN FOR RETIREMENT
THE ISSUE
Women need more money for their golden years than men, since they most often live longer, but usually end up with less. In the first of a two-part series, TO THE CONTRARY interviews women who mistakenly thought they were ready for retirement, and offers useful information for all women to take control of their financial futures.
Mary Ruth Nacash is a retired nurse anesthetist who could tell you a thing or two about the importance of planning ahead for retirement. A divorcee, she raised five children on her own by working nights, weekends and cramming in as much overtime as possible. During those decades of service, her employer assured her she was accruing pension benefits. After a lifetime of hard work, she was forced to leave her job for health reasons. That's when Mary was told the disturbing news: she had no pension plan. Like most women, Mary trusted her employer, rather than taking an active role in managing her retirement.<p>
Although women have entered the work force in record numbers, their access to retirement benefits has not followed at the same level. Nearly 60 million Americans--a majority of them women--don't qualify for pension benefits. More than one in 4 women end up impoverished because they depend on Social Security as their main source of retirement income. In addition, according to a recent Sun America/Teresa & H. John Heinz II Foundation poll, 80% of all Americans aged 25-55 are concerned they will not have enough money to live on when they retire.<p>
Women are often the ones that suffer the most from lack of planning for retirement. On average, women live five years longer than men do, so they need to plan to pay for those years. Second, they have lower lifetime earnings than men. Women also usually have small pensions, if any at all. In addition, the part-time industry--which usually doesn't offer pension options--is made-up primarily of women.<p>
One of the biggest problems facing women, however, is the result of women taking time off to have and raise children. Research indicated that women leave the work force and pit 15 percent of their careers on hold to raise children and care for family members. Social Security assumes people work steadily for 40 years and calculates retirement income this way, over-looking women. For providing a service to society and their families, women are usually being penalized in the pocket book at a time when the money is most important.<p>
In addition to women and pensions, the risks get even trickier for women who are divorced or widowed. Widows usually don't qualify for more than 67 percent of the benefits that she and her late husband received. Most likely, widows receive about 50 percent and need about 80. Women who divorce usually end-up losing their fair share of this important financial asset. Unless a woman is married for at least 10 years, she is not entitled to any of her former husband's Social Security benefits. For those who do qualify, the average benefit is $360 per month.<p>
All of these issues underscore the importance of pension plans and retirement savings. Women and men face difficult questions when raising a family, including: What do we save for, college or retirement? Parents usually choose their children over themselves and end-up funneling money from their retirement savings plans to their children's education account.<p>
One group that is educating women on the importance of retirement planning is WISER: Women's Institute for a Secure Retirement. The group works to improve the economic status of women's retirement by providing women with the practical knowledge necessary to access their retirement profile and to help them make changes in their long-term economic status. WISER is an advocate of educating, training, and counseling women on taking control of their financial future.
