The Unique Financial Challenges of Retiring Women
If you have ever wondered why women need a different approach to finances, take a look at the cumulative effects of our money issues as they are magnified in our aging population. There are 10,000 members of the Boomer generation turning 65 today and 10,000 more turning 65 every day for the next 20 years. So it behooves us as Boomers, daughters, friends, family members and as a nation to address the financial issues this generation will face. In my latest work for the Journal of Certified Senior Advisors, I addressed the unique challenges aging women face. Below are some excerpts from my article. But to fight a spirit of discouragement, first remember: we women are like the crocus:
- A crocus is hearty. It is one of the first flowers to bloom in the spring, and you might even find a crocus blooming through the snow.
- It is small but mighty, especially when it blooms in a bunch.
So put on a crocus mindset as you read the following.
One of the most common financial traits among women of all ages is lack of financial confidence:
In The Soccer Mom Myth by Michelle Miller and Holly Buchanan (2007), the authors comment on research data indicating men have a fight or flight response, while women would “tend and befriend.” They write: “We’ve seen brain differences that give women advantage in verbal skills. This combined with their innate sense of community and sharing, leads them to place greater value on relationships. Men are competitive and hierarchical. Women look for similarities and value cooperation.” In the field of finance, where rank and status are heavily valued, is it any wonder women are lacking confidence?
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Given this confidence gap, it’s imperative to address the real issues before trying to make financial changes:
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Directions for Women is an organization created to address women’s dearth of financial confidence. It uses the following tagline to indicate the most helpful order of services when working with women: Empower, Educate, Engage. When asked, “What does financial empowerment look like?” founder Eleanor Blayney suggests a willingness to talk about money with loved ones, spending in a way that honors values and responsibilities, learning from past mistakes, having the courage to speak up to get the support and answers she needs, and recognizing the choice to delegate—not abdicate—responsibility for managing financial affairs. An empowered woman will be a more effective student when she gets to the education phase because the context of her financial decisions will be clearer.
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What is the best way to support aging women who may not have the money to retire fully?
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Focus on Reinvention, not Retirement. In the coming years, fewer boomer women will be able to retire in the traditional sense of the word. But that doesn’t mean they can’t enjoy this phase of life. There are ways of working that will still fit into an aging woman’s life style, and may even inspire her in new ways. Focus on those possibilities and help her get creative about her contributions to this world. Women possess a tremendous ability to adapt to new situations, so they should be encouraged to continue working in some way in order to delay the years of retirement portfolio draw-down. When the Social Security program was designed in the 1930s, life expectancy was only fifty-eight for men and sixty-two for women. But the retirement age was set at sixty-five. This program was not designed to cover decades of retirement years as we have now come to expect. Now is the time to begin reinventing ourselves to create a new era for the golden years.
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One example of reinvention for a growing population of single women is alternative housing options:
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With a growing number of older homeowners unable to afford to maintain their residences on their own, change is on the horizon. The fact is the boomer generation will need to embrace some new housing models, such as the Golden Girls strategy of living with friends, or the multi-generational housing that is coming into vogue among all age groups. As with everything else the Boomers have done, they will lead the way to a new way of looking at aging.
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For the full text of my article in the CSA Journal, click here.
