RETIREMENT CRISIS: FOR WOMEN "THIS IS OFF-THE-CHARTS SEVERE!"

KEY POINTS:

  • An overall retirement savings deficit of between $6.8 and $14 trillion in the United States!
  • According the National Institute on Retirement Security, the median household retirement account balance is a $3,000. For “near-retirement” households, that number only goes up to $12,000!
  • Women over age 65 are 80% more likely to live in poverty than their male counterparts,
  • Women age 45 face a median $522,000 shortfall for retirement by age 65, whereas men face a shortfall of $267,000. Both gaps are dangerously large,
  • The average social security benefit for women over 65 is less than $14,000 a year, whereas for men it is roughly $18,000.

--SOURCE: 04-17-17 Lear Capital - "The Retirement Crisis and Women - "This is off-the-charts severe..." --

We know that there is a retirement savings crisis in the United States. People in general just aren’t saving enough, not even close! According the National Institute on Retirement Security, the median household retirement account balance is a $3,000. For “near-retirement” households, that number only goes up to $12,000! This creates an overall retirement savings deficit of between $6.8 and $14 trillion in the United States!

Women Face an Even Less Secure Retirement Picture…

As rough as this situation is, it hits women especially hard. Women are overwhelmingly more likely to take career breaks to care for children and/or aging relatives. This results in

  • fewer years contributing to 401(k) accounts,
  • less job tenure and
  • lower total earnings over their working lifetimes. While these labors of love are invaluable, they do take their toll on a woman’s retirement security.

Women in Poverty…

Women

  • live longer,
  • earn less and
  • spend more on average on healthcare than men[1].

They necessarily have to do more with less where retirement is concerned, and the reality is women over age 65 are 80% more likely to live in poverty than their male counterparts according to the National Institute on Retirement Security.

"This is off-the-charts severe."

...is how Manisha Thakor, Director of Wealth Strategies for Women at BAM Alliance characterized the retirement situation for women in a recent interview with Kiplinger. “There's a trainwreck happening, and society is saying, 'the train may have some problems.'" She continued.

A study conducted by Financial Finesse found that women age 45 face a median $522,000 shortfall for retirement by age 65, whereas men face a shortfall of $267,000. Both gaps are dangerously large, but for women, potentially catastrophic. Further, social security also seems to shortchange women. No one expects to retire in comfort on social security alone, but the average social security benefit for women over 65 is less than $14,000 a year, whereas for men it is roughly $18,000.

Another Crisis Could Hit Women Especially Hard – AGAIN

People near retirement age had an especially tough time in the aftermath of the housing crash. Many had to drastically delay and/or downgrade their retirement dreams. Today 25% of men feel they have recovered compared to just 14% of women. With so many still reeling from their losses, and another sell off on our heels, are you prepared? Are the women in your life well-positioned to weather the coming storms?

Caregivers

It’s the toughest job and the most rewarding job, but not financially. If you or someone in your life has taken time out of the labor force to devote themselves to caregiving, is there a plan to make sure THEY are taken care of properly in their golden years? You might consider asking your financial adviser if a spousal IRA is an option. This is designed for the retirement security of non-working spouses. The working spouse makes contributions to this account opened with the non-working spouse’s social security number. As a couple, this could double your retirement savings potential and give you both added peace of mind. And, of course, a precious-metals-backed IRA is a great choice for long term security in an uncertain economy poised for another crash.

Career Women

For women in the paid work force, maximizing your monthly social security benefits, extending the life of your employer-matched retirement plans, and delaying the days when your retirement accounts begin to get smaller - rather - than bigger are your best bets.

In addition, many experts recommend a healthy allocation of 10-20% of your overall portfolio in precious metals, especially silver right now. For the remaining allocation, many retirement experts recommend looking into annuities for the guaranteed income they provide upon maturity.