The average woman faces a “triple threat” that the average man does not face: they live longer, they have less income earning years, and to add insult to injury, their average income is less than the average man. It is true that there are many exceptions to the rule regarding the triple threat. There are women who earn more than the average male. There are women who work earning an income for more years than the average male. Finally there are women who live less long than the average male.
But what if you are average or even close to average?
Any one of these factors could have a significant impact on one’s long term financial situation and ability to save for retirement. According to the US Census Bureau, the average woman will live more than five years longer than the average male in the United States. The average salary for a full time year round worker is $47,127 for men as compared to $36,278 for women. Women also have a greater tendency to leave the workplace to play the role of caregiver whether to children or dependent parents.
The combination of all three of these factors dramatically increases the need for planning for the future.
According to a Government Accountability Office report, 12% of women over 65 live in poverty compared to 7% of men. This number substantially increases to 21% and 15% for divorced and widowed women respectively.
Though I would encourage just about everyone to think about their finances, women especially need to be vigilant. There are simply too many factors stacked against you to not pay attention to your finances.
I have the following suggestions for women:
- Live well below your means.
- Save more than you would think that you need to save.
- Be involved in your finances.
Consider taking a look at your finances today. Work with someone to develop a plan on how to prepare for the “triple threat”. There is a good chance that the “future you” will thank you for your prudence.