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Because They Outlive Men, Women Face More Financial Challenges in Retirement – Which Makes Proper Planning Essential

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If you’re interested in living a longer life, it helps if you’re a female, at least in the United States. According to the CDC, U.S. men can expect to live about 73.5 years, while their female counterparts will live almost six years longer. That’s a lot of extra time to enjoy life – but it’s also a lot of time to have to pay living expenses. In other words, longevity comes with a cost.

That was our reaction as we read this recent article from Kiplinger in which Atlanta-based financial professional Bradley Rosen sounds a warning for women. Because you’ll likely outlive a male spouse or partner – possibly by a decade or two – it’s particularly important that you as a woman start planning now for the financial challenges you’ll potentially face in retirement.

Rosen’s article contains some good food for thought, we think. He bases his three recommendations on firsthand observations of his own grandmothers, whose financial struggles in old age prompted Rosen to take seriously the challenge of financial planning for his female clients.

Women Face Significantly Higher Longevity Risk

“Running out of money is the number one fear for the majority of retirees,” Rosen writes in Kiplinger, “but the longevity risk is even greater for women. Not only do they face uphill, systemic battles with their finances, like the gender wage gap, but they also have a greater chance of living longer.”

As we noted above, U.S. women outlive men by about six years, but Rosen quotes another, even more dramatic statistic: 85 percent of U.S. centenarians are women.  A look inside the average assisted living facility in America will show that 70 percent of residents are women, as are two-thirds of nursing home residents.

With that demographic reality in mind, says Rosen, “Having a well-thought-out wealth plan is especially important for women to help ensure a successful retirement, no matter how long it lasts.”

Two Grandmothers in a Financial Bind

“I have seen firsthand what can happen to women who do not have a wealth plan,” Rosen recalls. “My own grandmothers, Rose and Lilian, lived well into their 90s, and one outlived her money while the other came close to running out — a financial nightmare for them and their loved ones who eventually had to supplement the cost of their care.”

He draws upon this experience as he makes his recommendations. “Their stories provide valuable lessons to empower the next generation of women with financial knowledge and strategies to create a wealth plan that outlives them,” he writes, offering several suggestions – we’ll call them “building blocks” – targeted especially toward women.

Building Block #1: Saving Enough Money

Rosen writes of his grandmother Rose, a schoolteacher and single mother. “She owned her own home and rented the additional upstairs space for extra income,” he says. “A proactive planner, she had active investments and a pension from the Miami school system to help pay for her eventual retirement. From the outside looking in, Rose did everything ‘right’ when it came to her finances.”

Still, says Rosen, Rose didn’t anticipate three decades of income needs, combined with high costs of long-term care. As a result, she was unable to pass along her assets to her family, something she had wanted to do.

Rosen also observes that the pay gap between women and men not only impacts the ability to save but also affects future Social Security earnings, an inequity he longs to change. “But while we wait for positive change,” he cautions, “as a financial adviser, I believe women can use a strategic wealth plan to maximize their savings.”

We lack the space to share Rosen’s specific recommendations here, which include various financial tools to make dollars go farther. He also advises long-term savings outside the traditional 401(k), using tools like a Roth IRA as a strategy to lower future tax risk.

We also think it’s especially vital for women to prepare a financial dashboard – a tool that helps guide saving, investing and spending. With a financial dashboard in place, anyone can get a clearer grasp on her or his financial health and make better-informed decisions instead of taking unnecessary financial risks or “shooting in the dark.” Contact us and we’ll be glad to recommend a financial planner who can assist you

Building Block #2: Understanding Your Financial Picture

Rosen’s other grandmother experienced the trauma of outliving a spouse by decades. “My other grandmother, Lilian, came dangerously close to running out of retirement savings, living until just before her 98th birthday,” he writes. “When my grandfather passed away unexpectedly at age 76, Lilian lost one Social Security benefit, and at the same time, she began providing financial assistance to her youngest son, who was diagnosed with multiple sclerosis.”

Sadly, the burden of being part of the so-called sandwich generation falls disproportionately on women, caring for children and aging parents at the same time. What made Lilian’s situation harder was basic financial ignorance. “It also didn’t help that Lilian lacked any investment acumen,” says Rosen, “because her husband, Harry, had always taken care of their finances.”

This remains a too-common scenario, Rosen warns. “Time and time again, I work with widows who are left in charge of their money without a plan or without a full understanding of their financial picture. By 2030, female Baby Boomers are expected to control the majority of wealth, totaling about $30 trillion in assets. With such a great wealth transfer expected, it’s critical that women are equipped to navigate their financial plan with confidence.”

Here again, getting good, objective professional advice is an essential step.

Building Block #3: Planning for Long-Term Care

The longer we live, the greater the likelihood we’ll need higher levels of care, something both of Rosen’s grandmothers experienced. “Rose’s and Lilian’s longevity led to more years of high health care costs,” he recounts. “Recently-retired women can expect to pay at least $157,000 in health and medical expenses in retirement, which is 30 percent more than what was needed just a decade ago. And costs are likely to continue rising!” That figure excludes long-term care.

Rosen advises that women consider a long-term care insurance policy, and he explains some of the various options, including newer hybrid policies combining LTC with life insurance. Again, this is a detailed topic and we lack the space to do it justice, but the take-away is clear: as women outlive men, their long-term care needs are likely to be greater. Women should be particularly aware of the challenges of paying for future care to avoid burdening loved ones.

Longevity: Celebrate It and Prepare!

Rosen’s final admonition comes from the heart, we think. “Longevity should be something to be celebrated, but unfortunately, it became a huge financial burden for my grandmothers and their loved ones. May their stories act as a valuable resource for future generations and an example of how important it is to have a comprehensive wealth plan that proactively plans for all your potential retirement needs and protects against longevity risk.”

Women and men, singles and couples, all can benefit from proactive retirement planning. That’s why we’re here. Please let us help you along the road to retirement success.

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We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

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Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

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(originally reported at

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