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Successful Women Mean Happy Men

4646043_sI live in a house with four strong gals, Jill and our three daughters. I work in an office with three strong women as well; Jill, Susan and Pam. I find myself outnumbered by women in nearly every room I walk into in both my work and home life. But this has made me a much, much smarter man. I’ve learned that whenever I don’t listen to them, well, let’s just say it does not work out too well for me. What the heck, I may as well listen because they all take very good care of me.
 
In a life filled with women, and with the future of three young women to think about, it drives me crazy that there is so little retirement planning focused on them.
 
For generations, the financial plan for many women was to get married. They depended upon their husbands to build, grow and manage their finances. But that has changed. More and more, women are becoming the main breadwinner for their families. And that trend is continuing, I can see it in my own girls, who I know will become strong, independent women. As more and more women bear the financial burden in their households, that retirement planning is critical for them.
 
Unfortunately, studies upon studies have proven that women lag behind men in their retirement planning. (Although this may not be true for many female Cutter Family Finance readers.) Some argue that the male dominance in the financial industry causes women to shy away from meeting with advisors. Others say that women lose their financial momentum when they take time away from their careers to raise a family. Still others blame the mother’s instinct to put her family before herself, pushing her own financial future to the back burner. The truth probably lies somewhere in a combination of them all.
 
While the reasons for the lack of retirement planning for women are still being debated, the effects are clear and substantial. Women are living longer than men, but are saving less. In fact, a recent report from the ING Retirement Research Institute found that women who are ages 50 to 69 have about 20 percent less in retirement savings than men in that same age group. Together, this increase in life expectancy and lack of savings has left a pretty good chunk of all women over the age of 65 living in poverty. This is a growing problem that needs to be addressed early in women’s careers to successfully shift that trend.
 
All women, whether they are single, married, divorced or widowed, need to take advantage of the benefits available to them through their employers. Despite the fact that more and more women are becoming either the sole or leading breadwinner in the family, many of them are not focusing on the financial benefits that come with their careers. Women must take advantage of their employer retirement programs, particularly when there is a company match. Unfortunately, in many households where both spouses are working, the wife’s disposable income is often used for more discretionary purposes, while the husband’s disposable income is invested in his retirement plan. There is no reason for this. Women must plan for the future, just as much as men do.
 
With the life expectancy of women continuing to rise past that of men, it is also important that women know what survivor benefits they will receive if their spouse passes away before them. The most common of such benefits include those from defined-benefit pensions and Social Security. With defined-benefit pensions, it can be tempting for a retiree to take the single life payout that brings higher payments. However, it may be advantageous for the surviving spouse (man or woman), if the retiree takes the joint survivor benefit, which allows for partial payments to continue after the death of the retiree. Another way to protect the financial future of a surviving spouse is to delay application for Social Security benefits for as long as possible. Doing so will ensure the highest survivor payments later.
 
Another study, performed by MetLife, found that 61 percent of men say they are most responsible for retirement and financial planning decisions in the household, while only 34 percent of women claim that responsibility. Nevertheless, it is critical that women understand the decisions being made (even if they defer to their husbands), and learn about financial planning earlier, so they can make more informed decisions later. This is particularly important because with the increase in life expectancy for women, and a rise in the number of divorces, the majority of females will, at some point, find themselves on their own. Therefore, they need to be able to make important decisions about their financial future for themselves. Whether this means seeking out a financial professional for advice or making smart decisions on their own, it’s critical that women learn the ins and outs of their financial portfolio now or they will suffer the consequences later.
 
Women are continuing to make strides in terms of their professional and financial independence, and it is important that as they reach those goals, they understand what to do when they get there. By planning for their future, taking advantage of the opportunities around them, and taking the time to educate themselves, women can continue to make strides in their retirement as well.
 
You see, I have a vested interest in women’s financial success; because they will be taking care of me . . . for the rest of my life!
 
Be vigilant and stay alert, because you deserve more.