Why Women Face More Risk in Retirement

Why Women Face More Risk in Retirement article image

Contributed by Catherine M. Seeber, CFP®, CeFT®, Vice President & Financial Advisor

It’s apparent that Americans, both women and men, have not saved enough money for retirement. Studies have increasingly indicated that many baby boomers have no financial plan in place to protect themselves against outliving their assets and the rising cost of health care should they live longer than expected. So what makes women so much more vulnerable than men?

Longevity. It’s a phenomenon seen in every population: Women live longer than men. In the most recent study by the Centers for Disease Control and Prevention (2017 Tables), life expectancy at age 65 in the United States for both women and men was 19.4 years—18.1 years for males and 20.6 years for females. At first, people tried to explain this fact by saying that men did more dangerous things and therefore died younger. Men ride motorcycles, don’t see the doctor regularly and take more risks. Realistically, these explanations didn’t explain much. It seems women just live longer. When they reach 85, there are roughly six women to every four men. But whether that’s a bragging right depends on the quality of life the women experience in those additional years.

Health-care costs. Because of their longevity, in fact, women have a greater likelihood of spending money on a series of multiple and chronic illnesses. Their rates for chronic conditions such as diabetes and high blood pressure are similar to those of men, but women are twice as likely to suffer from headaches and more likely to experience joint, back or neck pain. These conditions often require regular and frequent treatment as well as follow-up care.

Caregiving. Women are not only caring for their children, sometimes their children’s children, but also for aging parents; feeling it is their duty to do so. But few plan for it. And women often don’t realize the emotional and financial toll that caregiving can take. For generations, women have been expected to be wives, mothers and community volunteers. In fulfilling these roles, they were supposed to be cooperative, supportive, understanding and gentle while providing service to others—mostly at the expense of tending to their own health-care needs. The costs associated with these roles were further exacerbated by the women’s inability to focus on more lucrative careers.

Income inequality. The view of women as subordinate still affects them in the workplace. Women who hold year-round, full-time jobs earn, on average, 20 percent less than their male counterparts, the equivalent of 80.5 cents on the dollar. The gender wage gap is widest for African American and Hispanic women, who make just 61 and 53 percent, respectively, of what white non-Hispanic men earn. And although the gap is decreasing overall, progress is slow. At the current rate, American women will not reach pay equity with men until 2106. Women face challenges rising in management because of maternity leave, their need to balance home and work and their limited ability to travel. Some profess that it is simply outright discrimination.

Education misconceptions. But to tip the scales toward women in the workplace, there has to be a change in the perception of women, not in their qualifications. Over the past decade, we have seen dramatic increases in the education level of females, to the point where women now outnumber men in institutions of higher learning and graduate at higher levels than men. So it’s not that women lack the credentials necessary for advancement in the workplace, but that organizations are simply overlooking women for higher level positions. In other words, when a male and a female with the same credentials apply for the same job, the male counterpart is more often chosen over the female.

Catherine M. Seeber, CFP®, CeFT® Vice President | Financial Advisor Catherine.Seeber@captrust.com CAPTRUST | Southeast Region 800.216.0645 (ext. 25157) | 919.870.8891 fax | 302.740.2432 mobile www.captrust.com | www.captrustdirect.com