AARP study shows only 9% of women feel very confident that they will retire comfortably. Experts weight in
By Deborah Jeanne Sergeant
Many women aged 50–64 face financial hardship, both for affording day-to-day needs and for retirement savings, according to a recent AARP study.
Two-thirds feel concern that prices are rising more quickly than their income. Nearly half scrimped on health expenses because of costs, including missing or reducing doses of prescriptions. For 42%, an unexpected expense of $1,000 would be a major financial setback. Only 9% feel very confident that they will retire comfortably.
The reasons are more complex than pointing at the issues arising from the pandemic. Several factors may have placed these women on shaky ground financially, including domestic violence (which often includes financial abuse and is oriented toward women 97% of the time, according to the FBI), midlife divorce or widowhood, reduced earning potential because of childrearing, reduced earning potential because of providing elder care, and operating a family business or consulting business that has no retirement savings plans.
Short of a time machine to go back and make other choices, women do have options for getting into better financial shape.
Three experts suggest tips women can use to revert that trend.
• “Get on a budget first to find out where the money is going.
• “Get with a financial planner. See if the spending can be controlled to free up some money to start an IRA for retirement planning.
• “Sometimes, you have to get a part-time job. Some additional income stream would be doable for their schedule and lifestyle.
• “Start saving where you can.”
—Tips from Thomas M. Giunta, Thomas M. Giunta Income Tax Service, Farmington
• “If they don’t currently have a team, they need a network of people to whom they should get advice: a CPA-accountant, insurance broker and financial adviser. The financial adviser is the ‘quarterback’ to orchestrate the line of questioning and how she can save money.
• “Revisit coverage with insurance. Higher deductibles will reduce the premiums.
• “Reevaluate everything you’re doing. A life-changing event is very impactful. You need to run down everything in your life like earning potential, time until retirement, and goals that are realistic.
• “It’s also a great time to take inventory of what you have now so you know what you’re working with. 401k, IRA, cash in bank accounts and some not so obvious things like whole life policies, cars, property, vacation home, equity in your house. Look at all sources that could be used as an asset.
• “Look at your debts and liabilities. Can you reduce your interest rates? Can you tap into your equity?
• “Just about everyone is looking for good help and have tons of benefits. They are trying to compete with the job market. They are hiring.
• “Some see their investment accounts and think the only way to pay down their debts is to cash out their investments. We have ways to borrow against their investments, not their home, to pay that down, and I’m not talking about their 401k. In many cases, cashing out investments is not a good idea.
• “Depending on the scenario, I’ve had clients who have cars four or five years old that are paid off. They’ve dried up their net worth. Even $5,000 would help them for an emergency fund. They’ve come in to get a loan against that car.
• “Revisit your life insurance if you’re divorced. Could you sell the policy or borrow against it? There are tons of different avenues.”
— Tips from Constantine J Kitrinos, certified financial adviser and managing partner with Monarch Wealth Management, LLC in Rochester
• “You may try to seek help through the government, New York state or private charities. There are some programs that may help alleviate some of the financial burden. Among these programs are Social Security, Medicare, Medicaid, Supplemental Social Security, Welfare, Food Stamps, STAR exemption, Veterans benefits, Home Energy Assistance Program (HEAP), Weatherization Referral and Packaging Program (WRAP), Senior Citizen Rent Increase (SCRIE), Senior Citizen Homeowners Exemption (SCHE), and more. In New York, State the Office of the Aging may provide some assistance, too.
• “No one should ever feel embarrassed for seeking help, but above all, it is absolutely imperative to plan ahead and never became a victim of improper planning, or the lack of planning. We are here to help you in any way possible.”
— Tips from Diana Apostolova, investment consultant with Rochester Investments