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5 Ways Women Are Getting Screwed In Retirement And How To Avoid Them

The pay gender gap lives on, even in retirement. Here are five ways women get screwed in retirement -- and some tips about how to lessen the sting.

1. Women are paid less, something that will adversely impact the monthly amount they will receive from Social Security.
This is the old story about the gender pay disparity. The new twist is that Social Security is based on what you earned over the course of your work life -- and for many, that disparity will rear its ugly head again.

Women currently earn 78 cents for each dollar earned by men. That amount is even lower for African-American women (64 cents) and Hispanic women (56 cents). So not only is it harder for women to make ends meet while they are working, Social Security is based on your 35 highest years of earnings. You make less, you will receive less when you retire.

Social Security provides at least 90 percent of income for almost half of women 65 and older and the average Social Security benefit for women is about $13,000 a year.

Tip: If you have an ex-spouse from a marriage that lasted at least 10 years, you may be eligible to collect benefits from your ex's employment record. This could make it possible for you to not file early for your own benefits (something that further reduces them). The later you file for your own benefits, the larger they will be. The only catch to claiming benefits from your former spouse is that you must remain single.

2. Women have shorter work lives and earn less over the course of their careers.
Women, historically, have been the ones who step out of the workforce to raise children. This not only impedes their progress up the career ladder but it also reduces the total number of years they spend employed. High-profile cases notwithstanding, a
2014 study from the Women’s Institute For A Secure Retirement (WISER) found that just 57 percent of female pre-retirees and 26 percent of female retirees say they have worked (or expect to work) full time for at least 40 years, compared with 68 percent of male pre-retirees and 45 percent of male retirees. For women, that means less money accumulated or saved for retirement.

Tip: If you have not worked or do not have enough Social Security credits to qualify for your own Social Security benefits, you may be able to receive a spouse’s benefits. To do so, you must be at least 62 or any age and caring for a child who is younger than age 16 or disabled.

3. Women are the caregivers and that takes its toll -- literally.
The MetLife Mature Market Institute estimates that the financial cost of caregiving for an individual female caregiver in terms of
her lost wages and Social Security benefits in 2011 was more than $300,000. And yes, it is mostly women.

Tip: Try and get paid for it. Most states offer programs that use a Medicaid waiver to allow direct federal payments to family caregivers for their services. But this means, in most cases, that only care recipients whose income is low enough for Medicaid status qualify. In New York and California, for example, the care recipient must apply for and be granted admission to a personal assistance program. The number of hours of care covered will be determined by a caseworker. The care recipient is then in charge of recruiting, hiring, training and firing the personal assistant. Payment comes directly from the state, notes AARP.

4. Death and divorce of a spouse hurts women more.
The Government Accountability Office found that divorce and widowhood had more pronounced effects for women than for men. The report found that women’s household income, on average, fell by 41 percent with divorce, almost twice the size of the decline that men experienced. For widowhood, women’s household income fell by 37 percent -- while men’s declined by only 22 percent.

Tip: Golden Girls, anyone? Co-housing arrangements are on the uptick. Groups of friends are pooling resources and finding it to be an agreeable lifestyle. It reduces living expenses and provides a circle of people to combat loneliness.

5. Women live longer.
While on the surface, it's hard to see this as a negative, but what it really means is that women have more years over which to make their (reduced) retirement savings stretch.

Tip: Work as long as you can and save as much as you can. Look for ways to downsize not just your home but your spending in all areas -- before you actually stop working.

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