If I Were a Woman ..... Financial Matters Matter

If I were a woman, I'd be interested in adopting the habit of setting aside sufficient funds to invest for my retirement years.

And I'd definitely set aside the erroneous and harmful idea that women don't know as much about or aren't as interested in financial matters as are their male counterparts.

And even if I were a teacher or other public sector employee with a currently promised pension plan benefit, I'd still act as if that projected amount weren't a 'for sure' thing. See Higher Education in Illinois Is Dying.

The simple fact is that most public sector pension plans are already dramatically underfunded. Everybody knows that. 

But what everybody doesn't know is that these same underfunded plans are almost certainly not going to earn anywhere close to their assumed actuarial rates of return over time (bond returns and interest rates). 

That simply means that that which is currently dramatically underfunded will become even more dramatically underfunded over time. Facts are stubborn things.

But I'm not a woman (or public sector employee) so I can only encourage the better sex (and everybody else as well) to take seriously the changing world and the need to implement a program of 'self help' when it comes to personal financial responsibility and security.

And here's why: more and more the woman is the head of household financially due to one of many reasons: (1) never being married; (2) being married and a 50/50 partner in the family's financial decisions; (3) being divorced; and (4) outliving the husband.

For Many Women, Adequate Pensions Are Still a Far Reach has this to say:

"The majority (of women) over 70 rely on Social Security for most of their income, with an average monthly check of around $1,300.

But those . . . who worked consistently for long periods and enjoyed the benefits of working in fields like health care, education and public administration — where defined-benefit pensions became more prevalent — are in a sweeter spot.

Few people in those groups became rich. But very few fell into poverty, either. And in retirement, workers in those disciplines are more secure than their peers who worked in other industries, according to a report released in March by the National Institute on Retirement Security. Only 4 percent of retired women over 65 who worked in education, for example, are poor, according to the institute’s report, “Shortchanged in Retirement, Continuing Challenges to Women’s Financial Future.”. . .

An important factor is that those fields, in which women are a significant portion of the work force, are more likely to still offer a defined-benefit pension plan. Most public-school teachers, for example, have pensions. Nurses have lagged teachers because fewer hospitals and health care systems have offered traditional pensions, but they are still better protected than those working in most other fields.

For most women reaching retirement age today, however, their situation is still generally worse than that of their male counterparts.

“Women are 80 percent more likely than men to be impoverished at age 65 and older, while women between the ages of 75 and 79 are three times more likely than men to be living in poverty,” said Diane Oakley, the retirement security institute’s executive director.

Much of that can be traced to a persistent gender gap in retirement income. Men in 2014 received $17,856 in median pension income, according to the institute’s study; women had about one-third less, or about $12,000. A similar disparity applies to 401(k) savings, where women accumulated, on average, about two-thirds of what their male counterparts saved.

A large part of the difference between women, who had $25,000 invested, on average, versus $36,875 for men, stemmed, of course, from continuing disparities in wages. . . .

At retirement age, women are likely to be more financially vulnerable since more are single, divorced or widowed, and many are feeling insecure about their finances in retirement. Two-thirds of the women in a 2015 survey, by the consumer marketing research firm GfK, felt unsure or pessimistic about their retirement finances, compared with 40 percent of the men who felt the same way. . . .

Given the evaporation of traditional pensions and the stagnation of wages, the next generation of women to reach retirement age is likely to spend more time working. Increasing numbers of women over 55 are working full or part time, and the Bureau of Labor Statistics projects that by the end of this decade, about 20 percent of the women over 65 will be in the labor force."

Summing Up 

Women outlive men. That's a fact with which we're all familiar.

Women often are the only wage earner and adult in the household. That's also a fact with which we're all familiar.

Women need to take charge of their financial lives at an early age and then stay with it throughout their lives. That's a fact with which we all need to become familiar.

That's my 'male' take.

Thanks. Bob.