Several sets of recent statistics highlight the necessity of Baby Boomer women taking control of their own retirement plans. First of all, nearly 50 percent of women over age 65 are single1 – and for those who are in relationships, the odds are that they will be the surviving spouse and need more funds to support their long-term care. These numbers add up to one impossible-to-ignore fact: women need to plan for their retirements differently – with longevity in mind.

The Longevity Challenge

The number-one fear women nearing retirement have is running out of money, which makes sense considering they statistically outlive their male counterparts by an 8 percent margin2. Not only does this mean an extended period of retirement to plan for, but also the health care costs associated with longer lifespans. The situation becomes even more complicated when the higher-earning spouse passes away first (the 2011 U.S. census reported that 40 percent of women over 65 are widowed). An early death of the larger wage earner can cause income sources like pensions and social security to sharply decline, leaving the surviving spouse with half of what they expected to be able to live on in retirement.

While a number of publications offer a patronizing “Women should do the math and take charge of their own retirements” – we’re assuming women are already well-aware of that fact. But knowing you should do something and knowing where to start are two different things. We recommend consulting with your retirement advisor specifically about issues and risks related to a long lifetime. In many cases, a combination of investments, insurance policies and annuities can be worked out to meet your needs.

The Health Care Challenge

Health care can challenge women’s retirements well before the age of 65 – after all, women are often placed in the position of being caregivers for their own aging parents, which can decrease their ability to work and earn a living. Then, with many women outliving their husbands, they’re again put in the position of caregiving for their spouses. While women are taking care of everyone but themselves, it’s easy to see how they might forget to plan for their own future care. Unfortunately, Alzheimers and Parkinson’s diseases, broken hips, post-surgery care and live-in help take a heavy financial toll. And, since much of long-term care isn’t about medical expenses, helpers are caregivers aren’t covered by most medical insurance plans. While there are no easy answers, we recommend four actions you can take:

  • Take good care of your health now (it’s the best investment in your future you can make)
  • Look into long-term-care insurance. Some policies cost less if you start the policy at an early age, or if you buy through an employer.
  • Keep a reserve of savings specifically for long-term care.
  • Be very nice to your kids. (Really!)

–       The Savvy Investor


2The MetLife Study of Women, Retirement, and the Extra-Long Life, September 2011