7. Women: Demographics
• Life expectancies (2005): Men (75.2 years) and women
(80.4)
For couples of the same age, this means that women are
expected to spend their last five years being a widow.
husbands are still almost ½ year more educated and
about 2 ½ years older than their wives.
Impact of the health care costs
• Widower among men (4%) vs. widows among women
(12%)
Homeownership: 81% of widows vs. 67.8% nationally
• Average marriage span of 8 years
single working mother issues: custody, childcare, and debt
issues
8. Women
Earn less: 77.8 cents for every dollar men earn
Less likely to have retirement plan:
Tend to work in part-time jobs or for employers that don’t
offer retirement benefits
Fewer have defined-benefit pension plans.
And those with plans have smaller pensions because of
less time in the workforce.
Women are also less likely to participate in 401(k) plans
because of lower compensation.
9. Women
More likely to take career breaks / provide for others
before themselves
Children
Elderly parents (in laws)
Lower potential earnings over lifetime
Due to above:
Lower wage, more familial responsibilities,
11 years out of the workforce due to childbirth and care
giving to children and frail elderly (Brennan, & O’Neill,
2004).
10. Women
Women have lower Social Security benefits
Lower income and less time in the workforce also means
lower Social Security income
In 2007
unmarried elderly (age 65+) woman, SS comprises 48% of their
total income
unmarried elderly men : 37% and
elderly couples: only 30%
Fared worse in financial planning knowledge
Performed worse than men in financial literacy questions
on compound interest, inflation, and especially stock risk
diversification (Lusardi and Mitchell, 2008).
11. Women: Eventually, …
As pointed out by Brennan and
O’Neill (2004), as high as 90%
of women will need to be in
charge of their financial
management at some point in
their lives.
13. Personal Finance Basics
Delayed Gratification
Marshmallow Experiment (1960s)
Wants vs. Needs
Buy only what you heed
Do you know which one is wants vs. needs?
New normal needs for new normal economy
Personal Finance Planning
15. Smart Goals
SMART Goals
Specific…….. “Pay for lodging, transportation, meals
for a 5-day trip to Washington, D.C.”
Measurable… “$300 through fundraising,a$50 from
birthday money, save $25 week.”
Attainable….. “If I stick to my plan, I’ll have the money
when I need it.”
Realistic……. “I still havework toward this to live
on while I
enough money
goal.”
Time-Limited.. “I need to have all the money by 6
months from now.”
17. What To Do?
1. Make retirement plans a priority when you consider
a job
2. Work as long as you can at the highest salary you
can
3. Understand the effect on Social Security benefits of
divorce and remarriage
4. Put money away for retirement on a regular basis
5. Learn about your finances
18. All Bad for Women?
More likely to seek the advice of financial planners
19. Resources & Financial Advice
Own research
Hire professionals
Certified Financial Planner® (CFP®)
Chartered Financial Analyst (CFA®)
Certified Fund Specialist (CFS)
Chartered Financial Consultant (ChFC)
Certified Investment Management Analyst (CIMA)
Certified Public Accountant and Personal Financial
Specialist (CPA and PFS)
Selecting Investment Professionals (FINRA)
20. Financial Planning
Needs for Women
Fahzy Abdul-Rahman, Ph.D., M.P.H.
New Mexico State University
For New Mexico Conference on Aging 2011
Notes de l'éditeur
Psychology
Husband-wife age gap: http://client.norc.org/jole/soleweb/853.pdf
Life expectancies: U.S. Census Bureau, 2008U.S. Women's Bureau and the National Committee on Pay Equity, 2007.www.socialsecurity.gov "Social Security is Important to Women" October 2008.
Life expectancies: U.S. Census Bureau, 2008U.S. Women's Bureau and the National Committee on Pay Equity, 2007.www.socialsecurity.gov "Social Security is Important to Women" October 2008.
Lusardi and Mitchell, 2008
Psychology
The marshmallow experiment is a famous test of this concept conducted by Walter Mischel at Stanford University and discussed by Daniel Goleman in his popular work. In the 1960s, a group of four-year olds were given a marshmallow and promised another, only if they could wait 20 minutes before eating the first one. Some children could wait and others could not. The researchers then followed the progress of each child into adolescence, and demonstrated that those with the ability to wait were better adjusted and more dependable (determined via surveys of their parents and teachers), and scored an average of 210 points higher on the Scholastic Aptitude Test.
Make retirement plans a priority when you consider a jobConsider sacrificing some current salary in return for a good retirement plan, and seek out employers who will match part or all of your savings in a contributory plan. Work as long as you can at the highest salary you canThe longer you work, the more you can sock away for retirement. And the older you are when you retire, the fewer years of retirement you will have to fund. Higher Social Security benefits are an extra bonus for those years of hard work. If you pay into Social Security for at least ten years (or if you qualify for Social Security under your husband's work record), you won't have to pay monthly premiums for Medicare hospital insurance when you retire. Understand the effect on Social Security benefits of divorce and remarriageIf you divorce, you are entitled to Social Security payments equal to 50% of your ex-husband's benefits, if you were married for at least ten years. You'll lose that right if you remarry, though you'll be entitled to collect payments based on your new husband's benefits. A widow is entitled to her late husband's benefits as long as she doesn't remarry before age 60. Put money away for retirement on a regular basisJust $10 to $20 a week can add up, especially if you start young. For example, $20 a week invested in growth mutual funds from age 40 to age 65 will build to a nest egg of $92,000. Start at age 25, and it will grow to nearly $370,000. Learn about your financesDon't just sign tax returns, be sure you understand them. Get assistance from your tax preparer if you need explanations. Identify your financial assets and debts, and begin to save for your future by paying down debt and budgeting. If you are married, be sure that you and your husband each understand what you own and what you owe, and use insurance to plan for the possibility of death or disability.