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Not your mom’s retirement

By Jennie L. Phipps ·
Wednesday, March 30, 2011
Posted: 12 pm ET

I have a 101-year-old friend who lives independently and comfortably thanks to the foresight and financial acumen of her late husband, who died about 35 years ago, himself retired from a successful business career.

Most of today's women -- including my friend's 63-year-old daughter -- need and want to look at retirement planning completely differently. My friend's daughter has had well-paying jobs throughout her life and will collect Social Security on her own record. She has a pension from a former employer and has accumulated a significant amount in a 401(k) with her current employer. Many people would think that this woman is well positioned to retire, but she's nervous because she fears she'll live as long as her mother. And she knows that could take more money than she has been able to accumulate, in part because she raised her own son to adulthood without much help from anyone.

Women have special retirement challenges. Earlier this month, the White House released a report with the not very sexy title: Women in America: Indicators of Social and Economic Well-Being. The report confirmed what most of us already knew -- women live longer than men. Even though women have caught up in terms of education, they still earn about 75 percent of what men do. Because unmarried and divorced women are the most likely to have responsibility for raising and supporting their children, women are more likely to be in poverty than men.

MetLife, in conjunction with WISER, or Women's Institute for a Secure Retirement, points out that women frequently overlook a couple of retirement safety nets:

  • Only 48 percent carry disability insurance.
  • Just 18 percent buy long-term care insurance.

These insurance policies can look like expenses that a woman with too many bills can't afford, but both of them could pay off big time down the road. My 101-year-old friend regrets that she didn't have the foresight to buy long-term care insurance while it was still available to her. She needed no help living alone for many years, but for the last couple of years -- after she was in an automobile accident -- she has required some daily assistance. If she had bought long-term care insurance, it would definitely relieve her concerns about running short on money. The Social Security life expectancy calculator predicts she'll live at least another two years -- and at her age, that's expensive.

Meanwhile, her daughter plans to keep working another four years until she's 67. That might seem like a long time, but considering that her mother lived another 35 years beyond age 67, it's just prudent.

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March 31, 2011 at 10:34 am

If you are retired, then become disabled, do you receive disability insurance payments? I thought you only could get disability payments if you are disabled during your working years and can no longer work. Is there an age that you are too old to obtain a disability insurance policy?