June 24, 2019 — Women tend to do more of the worrying than men, at least in the circles we travel in. And for us men, that is usually a good thing for our preservation. When it comes to women’s big fears about retirement, the research primarily focuses on money concerns, but there is no shortage of other worries. We’ll cover the common concerns that we are aware of, but we are eager to hear what yours are in the Comments section at the end.
Top Worries – Money
A study published by the nonprofit Transamerica Center for Retirement Studies reported that 46% of women were concerned they wouldn’t have a comfortable retirement lifestyle. By comparison, only 31% of men had similar concerns.
Running out of money. This is the biggie. The Motley Fool reports that 42% of women fear they will run out of money before they reach age 80. It seems they worry for good reason too. Only 9% of women, who tend to earn far less than men over their lifetimes, have saved at least $300,000 for retirement. Since a typical retirement might require over $700,000 in savings or an equivalent pension, that isn’t going to be enough.
Here’s why. The average Social Security retirement benefit was about $17,000 a year in 2018. Since it is pretty hard to live on that amount, either your nest egg or a job has to make up the difference. Let’s take an example of a 66 year old woman who figures she needs $45,000 a year to maintain a comfortable lifestyle. If she receives the average Social Security income, she needs $28,000 per year more. She will be OK if her retirement nest egg equals $700,000 and she applies the 4% rule, the most common withdrawal technique.
But if her nest egg is less, let’s say only $300,000, she has a problem. If she still withdraws $28,000 per year to support her lifestyle, she is probably going to burn through that nest egg somewhere around her 80th year, depending on how well her investments do. For the record: a 4% withdrawal on $300,000 equals $12,000/year.
Life expectancy issues. Another money concern that women have relates to their longer life expectancy. At age 65 the average woman has a life expectancy of 20.6 years, whereas a man’s is 18. It doesn’t matter if the woman is single or in a relationship, odds are she is going to have more years to worry about running out of money than a man does.
Taking care of the finances. If a woman is single, she is used to handling the financial side of life. Hopefully she is confident about her skills, but it is probably safe to say that many woman (and men too) are concerned about being taken in or victimized by a shady or incompetent financial advisor. In many heterosexual relationships it is often the male who handles the finances. If the female is not kept up to speed about where the money is, how it is invested, and how to get it out, the survivor could face some very challenging problems. It is a topic that should be worried about – early on – but is often ignored.
Loneliness. The New York Times reported in “Aging Golden Girls” that according to a study at the University of California, San Francisco, 43 percent of older people have feelings of loneliness. Women worry about losing their spouse and their friends, or being ignored by their children (if they have them). Living arrangements can have a lot to do with loneliness – living by yourself in the suburbs is not usually a good solution.
Who will take care of me. If a woman has children, will they have the ability and inclination to help as she ages? If childless, the options are more stark. A 2015 report by the AARP made a prediction that the ratio of potential family caregivers will decline precipitously. While recently there were 6.8 potential family caregivers for each person 80 years old; the ratio might fall to fewer than 3 to 1 by 2050.
What if my husband or I get sick. Women tend to be better caregivers, so if she is the one to become ill she might have to count on her husband, if she has one. If her male partner, who is more likely to die before she does, gets very sick she might have to become a full-time nurse. Having the resources to hire needed help can be a concern too.
Where to live. Women can be torn about where to retire. Should they live near their children or grandchildren, or a place that fits their lifestyle better? What if the husband wants to retire somewhere where the woman doesn’t?
Mobility. Particularly if you are single, losing the ability to walk long distances or drive can narrow the borders of one’s life. Unfortunately, both men and women tend to think this won’t happen to them.
What if I become a bag lady. Related to running out of money, many women fear they will have nowhere to live and be dependent on the kindness of strangers.
Fear of becoming invisible. Women probably experience this more as they age and the culture of youth makes them feel less wanted. You can make up for it with your personality, but it is not that easy.
Bottom line. Retirement can bring enjoyment, but it also can come along with many worries. A giant concern for women is having enough money so they don’t run out before they die. But there are a raft of other problems as a source of worry too.
Comments? What worries do you have about retirement? Do you think they differ for women vs. men? What are your biggest concerns? Please share your thoughts in the Comments section below.
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