My Aunt Thummie, the youngest and the only one of my mother's 12 brothers and sisters still surviving, is 92. She's been widowed for 35 years and now lives with one of her daughters. Some days are good and some days aren't so good. She's been in and out of the hospital twice in the last month. Her children are taking turns caring for her, with one child who has done very well financially footing the extra bills.
Thanks to my aunt's situation, I read with particular interest a recent MetLife study on the importance of women taking charge of their retirement finances. The study pointed out that in 1950, life expectancy at birth was 71.1 for women and 65.6 for men, a five-and-a-half-year difference. For those who have survived to age 60 today, the average remaining life expectancy for women is 23.8 years, to about age 84; for men, the remaining life expectancy is 20.6, to about age 81 -- giving women a three-year advantage.
Most older women will spend a long time living on their own. In 2009, only 42 percent of women age 65 and older were married, compared to 72 percent of men. Of all women, 41 percent are widowed; they outnumber widowers by four to one (8.9 million vs. 2.1 million). About 14 percent of women age 65 to 74 are divorced, compared to 10 percent of men the same age.
The bottom line is that we older women have to figure out how to take care of themselves. Below are the suggestions MetLife makes in its study. None of them are surprising or radical, but they are certainly things that those of us approaching retirement planning as part of a healthy, happy couple may not think about.
- Take charge. Be aware of gender-longevity differences and their implications and seek, not generic, but gender-specific information and advice. Work with your husband or partner on information-gathering and calculations. Note to men: If your spouse/partner is inclined to assume less responsibility for decision-making in your household (or if one of you tend to dominate the planning), commit to equal involvement through shared information gathering and calculations.
- Plan for contingencies. Have a plan B, including calculations and details for various contingencies. Be sure they account for expenses like long-term care and the health costs related to a woman's longer life. Plan for emergencies; don't defer for "if and when they happen." Consider the implications of "cashing out" resources prematurely, like retirement plan benefits, guaranteed income joint-and-survivor options and Social Security benefits. Note to men: Be sure your contingency plan accounts for the needs of your partner and that benefits and insurance account for your spouse's life expectancy, assuring guaranteed lifetime income for both of you.
- Do your own math. Calculating your needs and resources is the key to planning and saving enough assets. Make sure your income and assets will last your expected lifetime. Use gender-specific estimates and calculations.
- Act now. Take a deep breath, consider your specific concerns and start planning with a variety of scenarios in mind. Note to men: If you haven't taken into account the extra long-life of your spouse/partner in your retirement planning, don't delay. Now is the time to make any necessary adjustments.