1. Women live longer than men.
A 2012 study from the Center for Disease Control and Prevention indicated that a woman born in 2012 could expect to live five years longer than a man born in the same year. Additionally, the study stated that a 65 year old women would likely live an additional 20.5 years.
While it may seem obvious, if a woman lives longer, she will need more money for her future needs than a same aged male. Furthermore, as we get older, we may have to consider elder care costs like in-home care, nursing homes, and assisted living communities.
2. Women earn less than men.
According to the White House, on average, full-time working women earn 77% less than a man earns.” Pew Research suggests an 84% gap. The good news is that for women between the ages of 28 and 37, the gap shrinks to 7%.
3. Women and their family
Often women will financially help their aging parent(s), which is another factor contributing to financial struggles as women age. Whether it be for elder care, helping a relative experiencing financial troubles, or continuing financial support of emancipated children, women feel the need to help and will spend their money to help their family members.
Women are also more likely to take breaks from working to care for their children or elderly parents. This can result in periods of time without income and sometimes earning less because of time away from the workforce.
4. Not enough life insurance.
What happens when the non-breadwinning spouse dies? If she was a stay at home mom taking care of young children, dad may have to have to find outside help to care for the children. If there was not enough life insurance on the mother, that could cause an additional drain on working dad’s resources.
If working husband dies, there should be adequate life insurance to not place an additional burden on the wife because there are additional expenses likely to be incurred without the breadwinning husband.
Couples want to be sure to have enough in case of an unexpected death. Things you may want to plan for – paying off the mortgage(s) or other debts, college for the children, an emergency fund, etc.
Now the question is “What can you do now?”
1. Create and stick to a budget. Take a few months of expenses and look at where you are spending your money. You will likely be shocked. We don’t realize how much our lunches out cost every day, coffee from Wawa or Starbucks, or even clothes. It adds up though… and may not be necessary
2. Set aside an emergency fund. Try to have money from your paycheck direct deposited into an emergency fund account. Ideally, putting away 3 to 6 months worth of expenses is advised.
3. Plan for retirement. If you are working and living paycheck to paycheck, if your company has a retirement plan and offers a company match, don’t miss out on that. It’s “free money.”
4. Protect yourself through insurance. Look into disability insurance, long-term care insurance, and the proper amounts of life insurance. Being out of work can put a drain on finances at a time when the additional stress is not needed. Plan for it in advance.
I know it is easier said than done, but do what you can to be sure that you don’t suffer hardships later. Later in life you should be enjoying yourself and spending time with your family and friends. You don’t want to be struggling financially.