Five Ways Retirement Will Look Different for Women

Most people regard estate plans as something needed for distributing your assets after you die.  In reality, however, a good estate plan maps out how you want to live in retirement, long before your death.  Every person has a vision of their days enjoying retirement, perhaps traveling or on a beach with a book;  however, careful planning is necessary to make this a reality.  Especially for women, as shown by the following statistics according to the U.S. Census Bureau estimates, there needs to be a “wake-up” call to make a plan sooner, rather than later:

• The annual gender wage gap shows that, currently, women make eighty (“.80”) cents for every dollar earned by a man.  So, in order to have the same contributions paid into a retirement account, a woman may have to remain in the workplace longer.

  
  

• Approximately fifty-five percent (“55%) of women age sixty-five and older (“65+”) are married.

  
  

• The average age that Americans retire is sixty-two (“62”) years old; however, to receive full Social Security benefits, the worker must currently wait until age sixty-six (“66”) or sixty-seven (“67”) (if born in 1960 or later) to retire.   Accordingly, over sixty-three percent (“63.1%”) of workers retire by age sixty-six (“66”).

  
  

• According to AARP Public Policy Institute, it is estimated over twenty-six (“26”) million women provided unpaid care for others during the prior year.  Therefore, many women may be leaving the workforce earlier than age sixty-six (“66”) to provide unpaid care for family members.

  
  

• Women have an average life expectancy of approximately four years longer than men.  Approximately nine and one-half percent (“9.5%”) of retirement age women who are widowed remarry.

  
  

• Two/thirds more women develop Alzheimer’s Disease than men.  According to the Alzheimer’s Association, a sixty-five (“65”) year old women has a one in six chance of developing Alzheimer’s Disease (which means that women of retirement age are twice as likely to develop Alzheimer’s Disease than breast cancer).

  
  

• More than seventy percent (“70%”) of nursing home residents are women, with the average age of admission at eighty (“80”) years old.

So, what do these statistics say about women in their retirement years?  First, because of the wage gap, it is likely that a woman will not have as much in her retirement account as her husband (assuming that she is part of the fifty-five percent that is married) and, therefore, rather than just considering the timing and the husband’s needs in retirement, the couple should plan to provide for both individuals in retirement.  For the widow or the woman who is not married, she may not have as much in disposable financial resources and should develop a plan to stretch her assets longer as she may be living on her own for a longer period in her later years.

Also, these statistics point out what every woman already knows, the woman in a relationship is likely to end up being the caregiver.  She is the one who will likely leave the workforce before age sixty-six (“66”) and will spend significant amounts of her time providing care for her family.  Furthermore, more females will have control of the family’s assets as they outlive males, so women need to be financially savvy and have a plan in place to ease financial burdens when caregiving is needed. 

Third, if the woman decides to remarry, specific estate planning may be necessary to ensure that the wishes of both individuals will be followed as to children from his first marriage, her first marriage, and perhaps, children they share together.  Even in families where everyone “gets along,” you need a good plan to keep the peace down the road after one spouse becomes sick or dies.

Fourth, more and more people are opting to live together outside of marriage, including owning assets together.  Not only do these people need a plan for assets, they need to execute documents that will allow one of the individuals to access healthcare information and make decisions for the other person if that person is unable to speak for themselves.

Fifth, women need to plan for themselves if they should develop Alzheimer’s Disease or any other debilitating illness.  Most Americans want to remain living at home, but what if Mom contracts Alzheimer’s Disease?  Since women comprise seventy percent (“70%”) of nursing home residents, it is important, while the woman still has mental capacity, to develop a plan as to where she will reside and who will provide the necessary care.

Women need to protect themselves by considering all of these retirement issues, including an honest discussion with your attorney, in order to develop a good Estate Plan, encompassing not just directives regarding your assets, but Healthcare Directives as well.  Women need to start caring for themselves as much as they do for the others in their lives in order to have an enjoyable retirement.