5 Ways Women Get Screwed In Retirement

Older women face even greater financial insecurity.
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1. Women live longer than men.

While on the surface this would appear to be a positive thing for women, when it comes to retirement it means that their life savings will have to stretch at least five more years on average, which, according to statistics from the Centers for Disease Control, is how long they will outlive the average man. Of the country's centenarians, 85 percent are women; just 15 percent are men.

Solution: Start early and make a plan. Housing and living expenses are likely the biggest expense on your budget, so look for ways to lower them now. If you can't downsize, try finding a roommate to share expenses. Consider moving to a less-expensive area of the country. In the early years of your retirement, consider working part-time or find other sources of income to bolster your nest egg. And another thing to work out is who will help you manage your care when you are no longer able to fend for yourself.

2. Women earn less than men.

Pay disparity impacts women at every life stage and retirement is no exception. Because of the double whammy of living longer and earning less than men, women need to save $126 for every $100 men save in order to have a decent standard of living in old age, according to an analysis by Financial Finesse.

Approximately 40 percent of working women earn less than $30,000 per year, and 60 percent make less than $40,000. Half of all women work in low-paying jobs without pensions, says the Women's Institute for a Secure Retirement. And yes, women earned 78-cents for each $1 earned by men, which adds up to a lifetime loss of more than $300,000.

Solution: While estimating future expenses can be a challenge, many financial advisers offer expenses worksheets and even calculators to estimate your longevity to get you started. Learn what you will need to live comfortably and develop a plan to get there.

3. Some older women remain financially illiterate.

In older traditional couples, the man generally handled the finances. If he died, his widow was often left scrambling for help with no first-hand knowledge of the couple's financial situation.

In 2013, WISER released A Survey of Recent Widows that found half of all widows lost at least 50 percent of their income when their husbands died; 37 percent struggled to figure out what they were entitled to from Social Security; and 26 percent couldn't locate or gain access to bank accounts and investments after their husbands died.

This is absolutely a case of what you don't know can hurt you.

Want to find out just how little you know about your retirement finances? Swallow hard and take this free quiz, courtesy of financial expert and bestselling author Pamela Yellen. Don't be discouraged. Only 20 percent passed and nobody got an A. But you will learn something when you read over the answers.

Solution: Educate yourself because this is your money and your life we're talking about.

4. Women sometimes confuse investing and saving.

The terms may be used interchangeably, but they have very different meanings.

Saving is when you put your money in a place where you can't lose it. Money invested is money subject to loss. Generally speaking, the higher the risk, the higher the potential gain. The lower the risk, the greater the stability but also the lower the potential gain.

Common wisdom says to diminish your risk as you grow closer to retirement and leaving your job. Higher risks may be taken when you are younger and have more years to recover from a loss.

Solution: Seek professional help. It could make the difference in the quality of your retirement years. Many communities and senior centers offer free financial planning advice. It's a good place to start.

5. Women don't trust financial advisors.

Surveys show that women are more likely to rely on family and friends for financial advice. Even when a couple has a financial advisor, if the husband dies, the wife may not feel comfortable working with the advisor alone. This is especially true if the advisor does not give her the same level of attention or respect, or communicate in a way that resonates with her, notes WISER.

Solution: Get over it. You want the best advice possible. Find a new one if you don't like the one your husband used.

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