Retire Smart: Recession Darkens the Retirement Outlook for Women
Friday, March 26, 2010

 By Mark Miller

Tribune Media Services
Janice Johnson left her job as a managing director at a major New York financial services company at age 49 to start her own executive training business. Almost immediately, that plan was sidetracked when her mother became seriously ill with the West Nile virus. Traveling to Mississippi-where her mother lived-to provide care became Johnson's main occupation for the next two years.
"Mom was in the hospital 16 days, then rehab in a nursing home for three weeks and then she was well enough for a group living environment," she recalls. "After that, my job was to clean out her very large home, where she had lived for 50 years, get it ready for sale and get it sold. That meant about 15 more trips between New York City and Jackson, Mississippi over an 18-month period. It left me enough time to consult but not focus on anything full-time." 
During that time, Johnson burned through her savings, and ran up "a fair amount of credit card debt." Today, at age 55, she's back on track, running her own financial consulting business. But Johnson's encounter with financial trouble so close to retirement age isn't unusual among women. 
Numerous studies show that women have much more trouble than men building for a secure retirement. Caregiving-whether for aging parents or children-often cuts into earnings and destabilizes plans. And, many women still earn lower wages than men in many occupations. All told, women earn about a third less than men make during their working lives-and that means they generate smaller contributions to Social Security, pensions and 401(k) accounts. And fewer women have access to workplace retirement savings plans than men.
Financial literacy is another challenge. "Women are not socialized from an early age to take ownership of their finances in the same way that men are," says Manisha Thakor, an expert on personal finance for women and author of "Get Financially Naked: How to Talk Money with Your Honey" (Adams Media, 2009).
"I say this as a feminist. When men are growing up, their conversations focus on deals and markets. Women talk about nurturing subjects."
Elderly women are the largest segment of Americans living in poverty. In 2007, 20.5 percent of unmarried women age 65 and older had income below 100 percent of the federal government's definition of poverty-far higher than rates experienced by men or married couples, according to Census Bureau data.
The recession is making things worse. A new survey of nearly 3,600 Americans workers conducted for the Transamerica Center for Retirement Studies by Harris Interactive shows that the number of women confident they'll be able to retire comfortably has dropped since 2007, before the recession. 
What's more, the experiences of men and women are diverging. Transamerica reports that 70 percent of women were participating in a workplace retirement plan in 2009, down from 78 percent in 2007. Meanwhile, the percentage of men participating in a plan rose from 76 percent to 82 percent over the same time period.
"The gap in retirement plan coverage between women and men has increased," says Catherine Collinson, president of the Center.
Collinson and other experts urge women to take the time to educate themselves about personal finance and retirement saving. It's also critical to make a considered decision about the timing of your filing for benefits-for most people, filing before the Normal Retirement Age will reduce lifetime benefits sharply. If your spouse has significantly higher lifetime earnings, it may make sense to file for spousal benefits, since you're entitled to receive the greater of your own Social Security benefit or half of a spouse's benefit.
Thakor adds that it's particularly important for younger women to take action early to build for retirement. "The three most important words are 'start saving now,' It's so important and so many women put it off and don't save until it's very late. If they understand those words in their 30s and 40s, the power of compounding can make up for a fair amount of the headwinds."
Millions of Americans are reinventing retirement, and Mark Miller is helping write the playbook for new career and personal pursuits of a generation. Mark blogs at; contact him with questions and comments at

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