Author Topic: Kiplinger: 3 reasons women will never retire  (Read 7739 times)

Sid Hoffman

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Kiplinger: 3 reasons women will never retire
« on: May 01, 2015, 08:53:43 AM »
Are you a woman?  Sucks to be you, because apparently you will "NEVER" retire!

http://www.kiplinger.com/article/retirement/T047-C000-S001-3-reasons-women-will-never-retire.html

Quote
3 Reasons Women Will Never Retire
Women face more hurdles than men when it comes to retirement.
By Sandra Block, May 1, 2015

There are lots of potholes on the road to retirement, particularly if you’re a woman. At Vanguard, one of the nation’s largest financial firms, the average male customer has saved $121,000 in his retirement account, while the average woman customer has saved just $78,000.
See Also: 10 Worst States for Retirement

To catch up, women need to understand the hurdles they face and figure out how to overcome them. Here are three roadblocks that could prevent you from retiring in comfort:

One: Women live longer. The average 65-year-old man can expect to live until age 84.3. The average 65-year-old woman can expect to live until age 86.6. While living longer beats the alternative, it costs money.

If you’re a woman, you’ll need more for living expenses and health care, particularly in your later years. You can estimate your own life expectancy with the help of online calculators such as the one at Livingto100.com. If the calculator estimates you’ll live to 95, you may want to work longer and hold off on claiming Social Security benefits. For each year you delay between full retirement age and age 70, you’ll get an increase in benefits. Another strategy is to buy an annuity that will provide monthly payments until you die.

Two: While women are catching up, they earn less than men, which means their nest eggs are smaller. Lower earnings also reduce the size of their Social Security benefits when they retire. To get past this obstacle, start saving as early as possible. That will give your savings more time to compound and grow. You should also check Web sites such as Glassdoor and PayScale to make sure you’re being compensated fairly.

Finally, learn more about investing so you can get the most from your retirement portfolio. Women tend to be less confident than men when it comes to investing, but a little bit of knowledge goes a long way.

Mutual funds are the easiest and most cost-effective way to build a portfolio. If you’re confused by the choices in your 401(k) plan or IRA, consider a target fund, which will automatically shift your savings into more conservative investments as you approach and enter retirement. Another option is to use low-cost index funds to build a balanced portfolio. If you’d rather invest in actively managed funds, check out the Kiplinger 25, our favorite no-load mutual funds.

Need more retirement advice? Read about 6 additional reasons why women struggle to retire.

Now yes, I realize that the obvious clickbait article is obvious clickbait, but it still makes me upset that such ridiculous things are acceptable from supposedly mature and honest outlets.  Of course - I guess the argument is that they simply aren't honest based on the evidence available.  Scare tactics are worth good money.

AM43

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Re: Kiplinger: 3 reasons women will never retire
« Reply #1 on: May 01, 2015, 11:41:55 AM »
Are you a woman?  Sucks to be you, because apparently you will "NEVER" retire!

http://www.kiplinger.com/article/retirement/T047-C000-S001-3-reasons-women-will-never-retire.html

Quote
3 Reasons Women Will Never Retire
Women face more hurdles than men when it comes to retirement.
By Sandra Block, May 1, 2015

There are lots of potholes on the road to retirement, particularly if you’re a woman. At Vanguard, one of the nation’s largest financial firms, the average male customer has saved $121,000 in his retirement account, while the average woman customer has saved just $78,000.
See Also: 10 Worst States for Retirement

To catch up, women need to understand the hurdles they face and figure out how to overcome them. Here are three roadblocks that could prevent you from retiring in comfort:

One: Women live longer. The average 65-year-old man can expect to live until age 84.3. The average 65-year-old woman can expect to live until age 86.6. While living longer beats the alternative, it costs money.

If you’re a woman, you’ll need more for living expenses and health care, particularly in your later years. You can estimate your own life expectancy with the help of online calculators such as the one at Livingto100.com. If the calculator estimates you’ll live to 95, you may want to work longer and hold off on claiming Social Security benefits. For each year you delay between full retirement age and age 70, you’ll get an increase in benefits. Another strategy is to buy an annuity that will provide monthly payments until you die.

Two: While women are catching up, they earn less than men, which means their nest eggs are smaller. Lower earnings also reduce the size of their Social Security benefits when they retire. To get past this obstacle, start saving as early as possible. That will give your savings more time to compound and grow. You should also check Web sites such as Glassdoor and PayScale to make sure you’re being compensated fairly.

Finally, learn more about investing so you can get the most from your retirement portfolio. Women tend to be less confident than men when it comes to investing, but a little bit of knowledge goes a long way.

Mutual funds are the easiest and most cost-effective way to build a portfolio. If you’re confused by the choices in your 401(k) plan or IRA, consider a target fund, which will automatically shift your savings into more conservative investments as you approach and enter retirement. Another option is to use low-cost index funds to build a balanced portfolio. If you’d rather invest in actively managed funds, check out the Kiplinger 25, our favorite no-load mutual funds.

Need more retirement advice? Read about 6 additional reasons why women struggle to retire.

Now yes, I realize that the obvious clickbait article is obvious clickbait, but it still makes me upset that such ridiculous things are acceptable from supposedly mature and honest outlets.  Of course - I guess the argument is that they simply aren't honest based on the evidence available.  Scare tactics are worth good money.

^
This

Its somewhat true. I know plenty of women making lots of money and most have almost zero interest in investing or learn how to invest. In fact my wife makes twice as much as I do and totally relies on me to invest our stash.

DragonSlayer

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Re: Kiplinger: 3 reasons women will never retire
« Reply #2 on: May 01, 2015, 12:29:38 PM »
Well, technically, they're not wrong. It is harder for women to amass as much money as men. When you factor in lower pay, years out of the workforce to be caregivers, and that  they tend to know less than men about investing, yes, it can be harder to gather up enough for a comfortable retirement. (Generally, there are plenty of exceptions and I'm one of them.) They do live longer, and they do tend to leave money matters to others. Those are just some facts gleaned from research over the years.

But to say they'll "never" retire is just lazy reporting. Sure, there are challenges, but every one of them is surmountable. Women can educate themselves about money. It's not that hard. They can take an active hand in money matters in their household. They can lobby for increased pay, or work a side hustle to bridge the gap. They don't have to be SAHM's or caregivers to parents, but if they make that choice they can make an informed choice and do it in such a way that it doesn't jeopardize their future. Can't do much about living longer, but taking some steps will make it so they have enough even if they live to be 100.

I wish more media outlets would focus on overcoming those challenges rather than throwing up their hands and saying, "Oh, well, it can never happen."

FatCat

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Re: Kiplinger: 3 reasons women will never retire
« Reply #3 on: May 01, 2015, 01:14:34 PM »
Quote
There are lots of potholes on the road to retirement, particularly if you’re a woman. At Vanguard, one of the nation’s largest financial firms, the average male customer has saved $121,000 in his retirement account, while the average woman customer has saved just $78,000.

What is the average male customer age and the average female customer age? It's possible that the average female with a retirement account is going to be younger than the average male customer due to generational differences in gender roles. Many older women I know didn't work and were SAHMs. The women who have retirement investment accounts tend to be younger.

NoraLenderbee

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Re: Kiplinger: 3 reasons women will never retire
« Reply #4 on: May 04, 2015, 09:28:09 PM »
What's the third reason?

LalsConstant

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Re: Kiplinger: 3 reasons women will never retire
« Reply #5 on: May 05, 2015, 05:49:47 AM »
So people who don't earn as much or save enough with significant medical expenses in their old age who are also living longer will face financial challenges.

...why is this limited to women again?

MgoSam

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Re: Kiplinger: 3 reasons women will never retire
« Reply #6 on: May 05, 2015, 01:01:38 PM »
What's the third reason?

Maybe they're pulling a Rick Perry?

forummm

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Re: Kiplinger: 3 reasons women will never retire
« Reply #7 on: May 05, 2015, 05:00:29 PM »
I thought the reasons were going to be stuff like "ladies always gotta have their new shoes" and such.

10dollarsatatime

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Re: Kiplinger: 3 reasons women will never retire
« Reply #8 on: May 05, 2015, 08:21:46 PM »
Damn it.  That's it.  I quit everything.  Excuse me while I go blow my emergency fund on shoes and lawn ornaments...

forummm

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Re: Kiplinger: 3 reasons women will never retire
« Reply #9 on: May 06, 2015, 09:52:09 AM »
Along those lines, I saw a great sexist consumerism commercial. It played up the mom being the one to take care of the kids, go to work, make dinner, and paint the house...

Then it had this montage of kids, dinner, painting, kids, dinner, painting, repeat. Because your walls all need to keep changing colors all the time or your're a bad mom. Don't spend time talking to your kids--spend money to paint your walls again.

MrsPete

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Re: Kiplinger: 3 reasons women will never retire
« Reply #10 on: May 07, 2015, 08:23:48 PM »
Stupid article. 

My husband and I are stronger as a unit than we could've been as individuals.  He earns more money, but I'm better at hoarding every dollar.  He has more in his 401K, but I have a pension in addition to mine.  We've been successful as a team, and we keep each other on track. 

However, one thing about the article is true:  Women are more likely to end up needing paid care in their elderly years. 

It's likely to be true in my house.  I am younger than my husband, I am in better health, and I come from a family with live-forever genes.  The likelihood is that in his last years I'll still be around to take care of him; he will have me as a personal nurse as he stays comfortably in our own home.  He won't be alone, and he will have fresh sheets and good meals every day.  However, when that time comes for me, I'll have to rely upon our children (who will have their own families by that point) or paid caregivers.  Don't get me wrong: I'm not saying I will need more medical care; I'm saying I'm more likely to be left on my own and may need help with daily living, which won't be free. 

It's something that I figure will happen, so I'm PLANNING for it.  I'm not saying, "Oh, woe is me.  I guess I'll have to work forever." 

But aside from that point, the article was just stupid.

teen persuasion

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Re: Kiplinger: 3 reasons women will never retire
« Reply #11 on: May 08, 2015, 11:40:10 AM »
My DH expected to NEVER retire, and left to his own devices he wouldn't have.  I convinced him to save, for BOTH of us (since I was a SAHM for nearly 20 years).  I do all the investing, he has no interest.  I am working now, but only part time (can't get more hours), and don't have access to a 401k, so we both view DH's 401k account as "ours".  So, yes, nominally my retirement account balance is a fraction of DH's balances, but we treat them all as joint.

I dislike the current retirement account rule system, which allows anyone to contribute to IRAs (to a relatively low max), but only those fortunate enough to work for an employer that chooses to offer a 401k (with a much higher relative max) can contribute to that in addition to an IRA.  Level the bar, please.

Sid Hoffman

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Re: Kiplinger: 3 reasons women will never retire
« Reply #12 on: May 08, 2015, 11:59:08 AM »
My DH expected to NEVER retire, and left to his own devices he wouldn't have.  I convinced him to save, for BOTH of us (since I was a SAHM for nearly 20 years).  I do all the investing, he has no interest.  I am working now, but only part time (can't get more hours), and don't have access to a 401k, so we both view DH's 401k account as "ours".  So, yes, nominally my retirement account balance is a fraction of DH's balances, but we treat them all as joint.

I dislike the current retirement account rule system, which allows anyone to contribute to IRAs (to a relatively low max), but only those fortunate enough to work for an employer that chooses to offer a 401k (with a much higher relative max) can contribute to that in addition to an IRA.  Level the bar, please.

You can still put $5500 per person in Roth IRA accounts.  That's $11,000 between the both of you, potentially in addition to the $18,000 in your husband's 401k.  Also, if his employer offers a high deductible health plan, you could do up to $6650 in an HSA per year.  Also, if you're in the 15% federal bracket, then saving in a regular brokerage account can have extremely low tax impact, as the long term capital gains and qualified dividends are tax-free at the federal level.  There's still plenty of options, even with only one of you having a 401k.  Save, save, save!

4alpacas

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Re: Kiplinger: 3 reasons women will never retire
« Reply #13 on: May 08, 2015, 12:02:22 PM »
I thought the reasons were going to be stuff like "ladies always gotta have their new shoes" and such.

teen persuasion

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Re: Kiplinger: 3 reasons women will never retire
« Reply #14 on: May 08, 2015, 12:14:24 PM »
My DH expected to NEVER retire, and left to his own devices he wouldn't have.  I convinced him to save, for BOTH of us (since I was a SAHM for nearly 20 years).  I do all the investing, he has no interest.  I am working now, but only part time (can't get more hours), and don't have access to a 401k, so we both view DH's 401k account as "ours".  So, yes, nominally my retirement account balance is a fraction of DH's balances, but we treat them all as joint.

I dislike the current retirement account rule system, which allows anyone to contribute to IRAs (to a relatively low max), but only those fortunate enough to work for an employer that chooses to offer a 401k (with a much higher relative max) can contribute to that in addition to an IRA.  Level the bar, please.

You can still put $5500 per person in Roth IRA accounts.  That's $11,000 between the both of you, potentially in addition to the $18,000 in your husband's 401k.  Also, if his employer offers a high deductible health plan, you could do up to $6650 in an HSA per year.  Also, if you're in the 15% federal bracket, then saving in a regular brokerage account can have extremely low tax impact, as the long term capital gains and qualified dividends are tax-free at the federal level.  There's still plenty of options, even with only one of you having a 401k.  Save, save, save!

Oh, we are.  My point was that on the surface, I do resemble the article: my IRA only balances are of course less than DH's IRA + 401k balances.  The playing field isn't even for all: employers control access to 401k accounts.  I'd like the OPTION to contribute as much as DH can.

4alpacas

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Re: Kiplinger: 3 reasons women will never retire
« Reply #15 on: May 08, 2015, 12:39:18 PM »
My DH expected to NEVER retire, and left to his own devices he wouldn't have.  I convinced him to save, for BOTH of us (since I was a SAHM for nearly 20 years).  I do all the investing, he has no interest.  I am working now, but only part time (can't get more hours), and don't have access to a 401k, so we both view DH's 401k account as "ours".  So, yes, nominally my retirement account balance is a fraction of DH's balances, but we treat them all as joint.

I dislike the current retirement account rule system, which allows anyone to contribute to IRAs (to a relatively low max), but only those fortunate enough to work for an employer that chooses to offer a 401k (with a much higher relative max) can contribute to that in addition to an IRA.  Level the bar, please.

You can still put $5500 per person in Roth IRA accounts.  That's $11,000 between the both of you, potentially in addition to the $18,000 in your husband's 401k.  Also, if his employer offers a high deductible health plan, you could do up to $6650 in an HSA per year.  Also, if you're in the 15% federal bracket, then saving in a regular brokerage account can have extremely low tax impact, as the long term capital gains and qualified dividends are tax-free at the federal level.  There's still plenty of options, even with only one of you having a 401k.  Save, save, save!

Oh, we are.  My point was that on the surface, I do resemble the article: my IRA only balances are of course less than DH's IRA + 401k balances.  The playing field isn't even for all: employers control access to 401k accounts.  I'd like the OPTION to contribute as much as DH can.
Or you could become your own boss and contribute MORE than a W2 employee.

Oslo_gal

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Re: Kiplinger: 3 reasons women will never retire
« Reply #16 on: May 10, 2015, 02:20:18 AM »
As I come from one of those gender equality, socialist-but-rich Northern European countries, this is really interesting to me. Because wages are high for everyone here, it is not uncommon for women to work less than 100 % when they have small children. And a lot of people fear for their retirement payments because of this. But on the other hand, we have a huge proportion of women in the work force in the first place.

What interests me is that in my group of friends, it is commonly the woman who runs the finances of their home. And I think that's totally common in general here. In my case, I'm also the main provider and we live of my income alone. I suspect that the point about generation differences is important. When we started planning to move overseas to the US (my husband is American), I was the one who freaked out and started looking into the finances. If this was the 50s, I guess I'd just assume that he'd take care of it while I'd be busy with cooking and looking for shoes and shit. I don't shop that much now, but clothes looked more awesome in the 50s :D

Janie

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Re: Kiplinger: 3 reasons women will never retire
« Reply #17 on: May 10, 2015, 06:55:55 AM »
Quote
Finally, learn more about investing so you can get the most from your retirement portfolio. Women tend to be less confident than men when it comes to investing, but a little bit of knowledge goes a long way.

That doesn't always play out well for men. Research at Berkeley  showed that male investors trade more often than women to their own detriment. Confidence has a downside sometimes. https://faculty.haas.berkeley.edu/odean/papers/gender/BoysWillBeBoys.pdf

Women invest less than men, but when they do they trade less and stay the course during market swings. http://www.investopedia.com/partner/betterment/articles/investing/030415/data-suggests-women-are-better-behaved-investors.asp

It seems to me women should worry less about confidence and just get in the game.

LalsConstant

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Re: Kiplinger: 3 reasons women will never retire
« Reply #18 on: May 10, 2015, 03:04:24 PM »
As I come from one of those gender equality, socialist-but-rich Northern European countries, this is really interesting to me. Because wages are high for everyone here, it is not uncommon for women to work less than 100 % when they have small children. And a lot of people fear for their retirement payments because of this. But on the other hand, we have a huge proportion of women in the work force in the first place.

What interests me is that in my group of friends, it is commonly the woman who runs the finances of their home. And I think that's totally common in general here. In my case, I'm also the main provider and we live of my income alone. I suspect that the point about generation differences is important. When we started planning to move overseas to the US (my husband is American), I was the one who freaked out and started looking into the finances. If this was the 50s, I guess I'd just assume that he'd take care of it while I'd be busy with cooking and looking for shoes and shit. I don't shop that much now, but clothes looked more awesome in the 50s :D

In these respects, the American economy really isn't fundamentally different, the workforce is 47 to 49 percent female depending on whose statistics you believe, which is about what you'd expect, since there would always be a small gap that would make it a tiny bit more male, one would think.   DOL seems to corroborate this too:

http://www.dol.gov/wb/stats/facts_over_time.htm

I can tell you from my mis-spent career in retail we have the same pattern in household finance and most of the larger companies have shifted their products, marketing etc. to try to corner that market as much as they can.  I generally hate infographics because they can be misleading but most of the personal spending and wealth in the US is female owned/controlled.

http://www.businessinsider.com/infographic-women-control-the-money-in-america-2012-2

I agree the generation differences are definitely interesting.  I don't mean to imply anything by saying this, but the Boomer generation is huge and has created the perception men earn more, but once they're gone I'm confident this will reverse.  I'm 34 and I've never outearned my female generational cohort.

http://lmgtfy.com/?q=women+make+more+than+men+

Considering the lack of educational attainment by males I'm not surprised.  No comment on what all this means if anything, as a single male it's purely academic to me.  It's always kind of interested me how these things shake out for whatever reason.