Women worry about their financial future
Nearly half of all women fear going broke and becoming homeless, according to a recent survey from Allianz Life Insurance.
Even though 54 per cent of women describe themselves as the household CFO and 60 per cent say they’re the primary wage earners, this fear extends to all corners of life and affluence, according to the report.
Forty-nine per cent of all women surveyed feared becoming indigent in retirement. The fear was highest among single respondents at 56 per cent, followed by divorced women, widows, and married women.
Part of what may be fuelling women’s lack of retirement confidence is a lifelong concern about taking care of family, suggests parallel research from Transamerica Life.
More than one in four women expects to take time or have already taken time out of the workforce to act as a caregiver for a child or aging parent, according to the study.
Of these caregivers, 73 per cent believe that these gaps will impact their ability to save for retirement. And, on that score at least, they’re correct.
Their erratic work history — and the fact that when they did work they generally earned less than what men were making — means women approaching retirement today typically end up with a smaller nest egg, lower pensions, less in RRSPS, and reduced CPP benefits.
The common thread of their fears about retirement lies in uncertainty for their own or their family's future and what, if anything, they can do about it.
“There’s a striking disconnect among women between how they envision their retirement and how they are preparing to realize that vision,” says Catherine Collinson, president of the Transamerica Center for Retirement Studies.
“As a society, we must do more to empower and equip women with the know-how to plan, save, and ultimately achieve a secure retirement.”
Many women also expect that their retirement will almost certainly involve financial caregiving, according to Collinson. Roughly a third of them expect that once they’ve retired, they’ll still need to provide financial support for a family member other than their spouse.
And, while that’s likely correct as well, it’s not necessarily a path to the poorhouse —assuming you factor it into your view of the future from the outset.
Whether it involves helping with college tuition, rent, mortgage payments, or mounting medical bills, few of the retirement plans developed years ago envisioned retirees shouldering these sorts of major expenses for any sustained period.
But your plan probably will.
It’s also important to realize that running out of money and running low on money are two completely different issues.
If you're currently providing financial support to your adult children or other relatives (or plan to in the future), speak honestly with them and set realistic expectations.
Your kids may not realize the degree to which your financial situation is changing and that you can't pay for many of the things you once did.
Be clear about both your willingness and ability to contribute funds to their specific financial goals, like helping them to buy a home, or to provide support if one of them is laid off or loses a job.
But don’t make long-term commitments that will mortgage your own future, particularly if you’re going to end up facing it by yourself.
Because women have longer life expectancies and often marry men several years older than themselves, periods of widowhood of 15 years or longer aren’t uncommon.
Factor in divorce or those single by choice and there's an 80-90 per cent chance you'll be making all the decisions, financial and otherwise, at some point in the future.
That’s the key message in Jan Cullinane’s recent book, The Single Woman’s Guide to Retirement, in which she focuses on the "5Ds":
- Death of a spouse (women have longer life spans)
- Divorce (more than a third of all divorces involve couples over 50 years old)
- Delayed marriage (women are waiting much longer to get married)
- Dumped (women can be either the dumpee or the dumper)
- Don't want to be married (many women are perfectly content being single)
Reading this book is like listening to a bunch of clever, never-married, gay, divorced and widowed women who’ve struggled with their fears and survived to talk about them.
Just like you will.
Contact Gordon here.
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