Women, Retirement and Social Security
Which of the following are reasons that Social Security is
especially important to women:
a) Women are less likely to have pensions when they retire. b)
Women live longer than men, increasing chances of outliving
their assets. c) Women have average lower lifetime earnings
because of pay-inequity and time out of the work force to care
for family. d) All of the above.
The answer is d) all of the above.
Women are living well into the eighties and many will spend more
years in retirement than they ever did working. As you can
imagine, this is placing a tremendous strain on the Social
Security system. One of the best ways to be prepared for
retirement is to prepare yourself.
"Forty-two percent of all women over seventy-five are living on
less than $13,000 a year, and when Baby-Boom women retire, only
an estimated twenty percent of them will be financially secure"
according to a special report titled "Why Most Women Can't
Afford To Retire" in the current issue of Ms. Magazine. It is
estimated that only 20% of boomer women (born between 1946 and
1964 will be financially secure in retirement.
Here's some wisdom for women planning for retirement:
1. Statistics show that 80% of women will need to take charge of
their own finances at some point in time. It is important for
them to fully understand their personal finances and
investments. If you don't understand your finances, ask your
husband to explain them to you, enroll in a class and your local
community college or learning center or check out some
financially related books from the library.
2. It's never too soon to get started investing for retirement.
The sooner you get started, the longer you have to let your
money work for you. Don't put off saving. Just $25 a week
starting at age 35 could add up to $100,000 to your nest egg
before retirement. Start now, automate the process by having the
money automatically deducted from your paycheck before you have
a chance to spend or even see it.
3. Whenever you take a job, always ask about their pension plan.
Find out how long until you are eligible, vesting requirements,
will the employer contribute to and/or match your funds and if
so, at what percentage rate?
4. Beware of taking Social Security early. Currently, the
retirement age for full benefits is 65, and the earliest age at
which one is eligible for benefits is 62. If you take your
retirement benefits early, the result is reduced benefits by as
much as 30 percent for as long as you live. The eligibility age
for full Social Security benefits has been revised from 65 to 67
years of age, to be phased in by the year 2022.
Here are a few resources on Women and Social Security. Some
sites represent different viewpoints. It is good to be aware of
the different opinions and to realize that the more you can save
for your own retirement, the better off you will be regardless
of what happens with the Social Security System.
Interesting Links:
The Social Security Administration: To read about available
programs and to order a statement of your estimated future
benefits, call (800) 772-1213 or check out their web site at
http://www.ssa.gov
Take a Social Security Quiz:
http://www.women4socialsecurity.org/quiz.htm
Women's Social Security Issues:
http://www.womensissues.about.com/newsissues/womensissues/library
/weekly/aa0 42000a.htm
Social Security Privatization Article:
http://www.socialsecurity.org/women.html
More Social Security Issues:
http://www.cpr4womenandfamilies.org/ss2000.html