Most Americans could stand to improve their knowledge of retirement planning, but it is especially important for unmarried women. Here’s what you should know.
It is an unfortunate reality that most unmarried women – whether they are divorced, widowed or never married – face much greater financial challenges than men in retirement.
Why? There are several reasons. First, women tend to make less money than men. On average, women make about 78 cents for every dollar a man makes. Second, women tend to have shorter working careers than men, either due to raising children, caring for aging parents or both. Less money earned usually translates into less money saved and lower Social Security benefit when you retire.
Third, on average, women live five years longer than men. This requires their retirement income to stretch farther. Finally, according to studies, women tend to be less knowledgeable and more intimidated about financial issues than men. This means they don’t always handle their money as well as they should.
Because of these issues, it is very important that women educate themselves when it comes to financial matters and retirement planning. Listed below are some good resources that can help.
A good place to start is with the Women’s Institute for a Secure Retirement, which is a nonprofit organization dedicated to financial education for women. At www.wiserwomen.org you can read and download for free a wide variety of easy-to-understand publications on retirement planning, money management, saving and investing, Social Security, health care, annuities and more. If you don’t have a computer or internet access, you can call 202-393-5452, order hard copies of their publications and have them mailed to you for a few dollars.
Another resource is www.mymoney.gov, a U.S. government website dedicated to financial literacy and education. The website provides free information and resources to help you make informed decisions including publications, financial calculators, checklists and budgeting worksheets. You can also call 888-696-6639 to order a free “My Money” toolkit that includes a variety of publications on saving, investing and getting the most for you money.
The Employee Benefits Security Administration, part of the U.S. Department of Labor, is another agency that offers a variety of publications. Two particularly good resources are the 62 page booklet “Taking the Mystery Out of Retirement Planning” and the brochure entitled “Women and Retirement Savings.” You can view both resources online at www.dol.gov/ebsa/publications or call 866-444-3272 and have them mailed to you for free.
Also, visit www.choosetosave.org, a website developed by the Employee Benefit Research Institute. The website offers the Ballpark Estimate retirement planning worksheet, more than 100 online calculators, brochures, savings tips and links to resources to help you manage your finances.
Social Security Help
You also need to get up to speed on Social Security. To help with this, the Social Security Administration has an online resource specifically designed for women that covers how marriage, divorce, widowhood, work, care giving and other life or career events can affect your benefits. It also offers information on SSI, Medicare benefits and provides calculators to help you figure out your future earnings at different retirements ages. You can access this information at www.ssa.gov/women or call 800-772-1213 to order their free pamphlet entitled “what Every Woman Should Know.”
Jim Miller, author of the “Savvy Senior” Book shared this article with the United Methodist Foundation, March 2013