In planning for the future, women should take into account they’re likely to live longer and have lower retirement income than men.
For the past 15 years, the MetLife Mature Market Institute has operated a center for studying aging and longevity. In September 2011, the institute produced a study titled “Women, Retirement and the Extra-Long Life.” In conjunction with the Scripps Gerontology Center of Miami University, they studied the challenges that women face in planning for retirement. Did you know that women are:
- More likely than men to age alone, and thus be responsible for their own retirement
- More likely than men to have higher health care costs throughout their lifetime
- Less likely than men to be adequately insured and thus have greater issues with affording the rising higher cost of health care
- More likely to be the caregiver in a long-term care situation with a family member
- More likely to need long-term care themselves at a cost three times the average cost for men
- Likely to have lower annual retirement income than men. The average income for men 65 and older in 2009 was $37,509; for women, it was $21,519.
Where to Start
The MetLife study showed that 39 percent of women expected to live to be 90 or older. Only 20 percent of men expected to live that long. Only one out of three women said they bore most of the responsibility for financial and retirement planning in their household. Only 55 percent of women had done the math to compute their estimated retirement income compared to 65 percent of men.
If you’re a woman (or man) employed by the federal government, you can get help with such computations. You can ask your agency’s human resources office for an estimate of your retirement benefit under either the Civil Service Retirement System or the Federal Employees Retirement System.
For younger employees, many payroll systems such as those operated by the National Finance Center (which serves several agencies) and the Defense Accounting and Finance Service also provide projected retirement estimates. They’re more general in nature, but can still be very useful.
Also, employees can compute their future income from Thrift Savings Plan investments via the TSP’s online calculators. In addition, the Social Security Administration provides a tool that makes it fairly easy to estimate your future Social Security income.
Once you’ve estimated your retirement expenses, it’s much easier to determine if the retirement income will meet your needs. The good news is if you are coming up short, you can work a little (or a lot) longer to increase your retirement benefits.
The MetLife/Scripps Gerontology study also offered the following resources geared specifically to women:
- Financial Planning for Women: Retirement Calculator (AARP)
- The Women’s Estate Planning Guide: Techniques for Protecting Yourself and Your Family by Zoe Hicks (Contemporary Books, 1998)
- What Every Woman Should Know (Social Security Administration)
- Women and Retirement Savings (Labor Department)