February 5, 2016

Women and Retirement Finances: A Rocky Road Ahead?

This post ran over 4 years ago. Recently, I have received some requests to deal with this subject. I thought I'd bring this one back since there are a lot of new readers since it was published. If it generates enough feedback I can take a fresh look at this important subject. I have updated a few links near the end of the post.

A comment left on a post a week or so ago asked if I'd explore the important subject of women and retirement finances. Since I am not a financial planner or expert, I have included some links at the end of this post to sites that you might find helpful. But the topic is important enough for me to do some basic research and pass along what I have learned. 

Building a financially satisfying retirement is more difficult for the average older woman for many reasons. Gender roles, lack of training in basics of investing, and a lack of confidence are all contributing factors. A depressing fact is that one in five women will live in poverty during her retirement. Also true:

*While working women earn less. Obviously that affects the amount available to save and invest, the size of any company pension, and the amount of a monthly Social Security check. So, what is to be done? How can women prepare for and thrive during retirement, married or single, widowed, or divorced?
*Women spend less time in the workforce. On average, females spend 10 years out of the workforce while raising children. Men average less than one year. There is a direct correlation to lifetime income.

*Women are less likely to have retirement plans. Again, because of less time in the workforce, or primarily involved in part-time work, fewer have actual retirement plans from their employers. 

*Women have lower Social Security benefits. The average social security check for a woman is $800.00 per month and for a man it is $1,200.
*Women live longer. The typical woman will live an average of 6 years longer than a man. That puts additional pressure on her retirement savings and investments to fund several more years. 40% of women living alone depend on Social Security of all their income. 

*Divorce can have a devastating effect on retirement. Because of the over-reliance on the husband's pensions and Social Security checks, divorce can leave a woman in a serious financial bind.

So, what is to done? What can a woman (or a man) do to improve the odds that a financial crisis isn't part of her (or his) future? Here are some common sense suggestions for you to consider:

  • Become educated on financial basics. The good news is that once comfortable with the hows and whys of various investment options, women tend to be better investors than men. They make less risky choices, are more likely to admit a mistake and move on, and tend to know what they don't know. Resolve to learn one new financial fact every week.
  • Train yourself to be financially independent. Be aware of the finances. Even if your husband or partner is handling the money know what is happening. Stay involved. 
  • Fund your retirement account regardless of Your age. For younger women, retirement seems eons away. Put in as much as you can, especially if your company matches funds. Otherwise you are leaving "free" money on the table.
  • Don't fear reasonable risk. If all you do is protect your capital instead of making it grow, inflation will put you farther and farther behind. Liz Perle, author of Money, a Memoir put it well when she said women perceive their investments like a lake, that is a finite resource. Men tend to look look at it as a river that is constantly renewing itself. Liz says consequently, "women are afraid to risk." Educated risk is not the same as speculative risk.
  • You don't have to do all this alone. There are plenty of investment groups and clubs that will help you learn and share ideas with others. The local library and the Internet contain a wealth of information and resources. Here are a handful of web sites that provide an excellent overview along with specific steps anyone can take to become more comfortable in managing finances.

Doing the background work for this post helped open my eyes to the unique challenges many women face in protecting themselves financially. Like so many parts of a satisfying retirement journey it boils down to taking charge of this part of your life. Learn what you need to know, have faith in your abilities and abilities, and constantly adjust and improve your financial plan.

February 1, 2016

What Should It Take to be a Good Citizen of The U.S.?

The post, What Should it Take to Become President, generated some interesting feedback a few weeks ago. Everyone who commented seemed to agree that a candidate for the highest office in the land should possess certain qualifications. One reader made a suggestion that is responsible for this post: what do we need to do to be a good citizen?

He is right. This is not a one way street where our leaders do all the heavy lifting and we are just along for the ride. No, a citizen has responsibilities, too. Not only do we have to evaluate and pick those who will do the best job in leading the country, but we are part of the "team." In large part, our actions will determine our future. 

So, here goes. What are our "qualifications" to take part in this grand experiment known as American democracy?

1) Commit to be educated. I would argue this is the most important requirement. A citizen must take the time to learn about the issues, to think deeply about the problems and opportunities we face, and to avoid the tendency to accept whatever the media or our favorite talking heads have to say.

Just because something is on the Internet, TV, or radio does not mean it is accurate and true, though it may be. A citizen's responsibility is to dig deeper. Consult multiple sources for insight, including those outside your normal comfort zone. Talk to others, form your own opinions but be prepared to change what you think if new information becomes available. Rigidity is not compatible with education.

2) Commit to participate. Not voting makes you no better than a non-citizen. Not supporting candidates and issues you believe in leaves you no right to complain about the outcome. Of course, you have every right and responsibility to fight for or against things you feel passionately about. But, if you don't play in the game, you can't simply complain about the score.

3) Commit to support or deny support as appropriate. Even if your dream candidate wins, even if every ballot proposition that you support passes, your duties are not over. There will be people, maybe lots of them, who disagree with you. You must work to support what you think is important and withdraw your support if someone or something doesn't seem right.

As the next point states, that doesn't mean you stop paying taxes if you dislike the IRS. It doesn't mean you occupy a federal building to protest a policy you find odious. It does mean you vote against people or things. It does mean you legally protest, with signs or petitions. You use your money and time to support or deny support. 

4) Commit to follow the rules. With a civilized, organized society comes the rule of law. As much as a citizen disagrees with the speed trap south of town, if caught driving faster than posted, he will pay the fine. If  called to jury duty she will serve. If someone disagrees with a point of law you don't disobey it but work to change it. As our society is structured, the Supreme Court is the ultimate arbitrator. Disagree with a finding? Work to change the law. A citizen doesn't have the right to disobey legal statues he disagrees with. Otherwise, we face anarchy.

5) Commit to be committed. Being a good citizen is not a part time job. You can't "turn it on" in an election year and then hibernate until the next one. As the points above should make clear, this is a full time responsibility. 


January 29, 2016

Are We Changing How and Where We Want To Live?

Sun City's housing spirals
The Phoenix metropolitan area is where the first retirement community was built. On January 1, 1960 Del Webb opened Sun City and that model for the 55+ community has continued to this day. Just over a year ago I was invited to spend a few days at the company's newest version, Sun City Festival, and write about my experiences. If you missed the original post, click here.

Since that time some articles and research reports have crossed my desk that have piqued my interest. Certainly, the Sun City model and all its various counterparts around the country continue to attract a steady stream of buyers. At the same time, there appears to be an important shift in how and where some retirees want to live and build a satisfying retirement.

When Sun City opened is was quite a trek to downtown Phoenix. The more recently opened Sun City Festival community is even farther removed, though suburban shopping and services are within a dozen miles. But, what appears to be happening is a growing interest in living closer to a city. 

This is not necessarily to be closer to a higher concentration of restaurants, entertainment venues, and shopping, though that may be part of the appeal. Rather, a majority of retirement community residents now say they expect to be working, at least part time, after retirement, and don't want a long drive. Isn't it interesting that retirement can now include working and a commute, two of the major reasons someone retires in the first place! 

There are retirees who do want to ditch the green lawns and sameness of a typical suburban neighborhood for the excitement of an urban environment. Many cities are seeing condos designed for a wide mix of ages pop up in the urban core. In the case of Phoenix, the availability of light rail, having 12,000 ASU students downtown, and a burgeoning entertainment district have resulted in over 2,000 additional housing units recently opening up in the city core. Many are targeted at empty nesters and the recently retired professionals. 

Another trend that is taking hold is a shift away from the appeal of golf or tennis as the primary recreational activities in these communities. No one is predicting the end of these sports in these locations, but reports indicate personal fitness and being able to enjoy nature without a club and bag or racket are growing in appeal. Fitness centers with both equipment and classes as well as extensive hiking and biking trails are essential in the "new" retirement communities. 

In a recent study by Merrill Lynch and Age Wave reported by CBS News, two-thirds of the retirees questioned say they prefer to live in a community that is diverse in the ages who reside there. The age-restricted community may be on its way to the dustheap, as the thought of living with only those of retirement age is rapidly losing attraction. This finding doesn't surprise me. Comments on this blog have pointed to this trend for quite some time.

There was one particular finding in the research that does surprise me a bit: downsizing is not as popular as I thought it might be as we age. In fact, if family and relatives are nearby or visit often, a new retirement home may be larger to accommodate extra get-togethers. As a good example, Chuck from Tennessee, a regular reader and commenter, moved into a bigger retirement home. But, I'd guess that the majority of comments on this blog on this subject like the idea of simplifying and downsizing as a welcome step in retirement. 

Of course, I guess I shouldn't register surprise: I ended up moving to a bigger home when we decided to move close to the grandkids. Betty and I thought we wanted a smaller home, with less yard to maintain and a simpler lifestyle. That wasn't what happened, and thank goodness. With almost weekly family dinners of 7-13 people, game nights, football parties, and croquet in the backyard, a small house and a smaller yard would not have allowed us to enjoy all this quality time together.

Back to the research study, the desire to "age in place" for as long as possible remains a powerful motivator. The majority of us attach more emotional value to our house that its actual monetary value. The equity we may have is not worth more than the memories and feeling of home.

I should also note other living options that have been explored in other posts: living full or part time in an RV, being a snowbird and living for part of the year in a different climate, co-housing and sharing space with others, opting for an apartment or condo in the heart of a city as an alternative to a life in suburbia, or even living part time on a cruise ship!

Obviously, what is liberating is this freedom to spend all or part of our retirement in a setting that best suits us at this point on our satisfying journey. Whether it is a traditional retirement community, a house on wheels, a bigger home, a smaller home, the same home....we make the choice.

January 25, 2016

39 Years and Counting

Sometimes I look at the woman sitting near to me on the sofa or in the car, across the table in the restaurant, or next to me in bed, and have a powerful thought: I simply cannot picture my life without her presence. Later this year we will have been married 40 years. I realize that is 60% of my life and 65% of hers. We have lived together much longer than we have lived apart.

Together we have made and raised two incredible daughters. We have lived in ten different houses in four different states. Our homes have been blessed with five different dogs (sorry, Bailey, but you weren't the first). a few rabbits, fish, a mouse or two, and an occasional bird that flew down the chimney and deposited soot all over the ceilings. 

We have traveled the world and found places that call to us in that special way that certain locations do. We have settled in the desert for over 30 of our years together and learned to live with over-the-top heat all summer and Christmas time spent in shorts in the backyard. Betty still misses the vibrant green that is not part of the desert.  Being so close to family instead of maple or oak trees has been a trade off she is willing to make, as long as we take occasional trips to see "real trees."

A few weeks or so ago we were watching a movie about a woman who was single, after many years of marriage. She was struggling with how the dating environment had changed and what she should do to meet new people. Pretty much simultaneously, we turned to each other to state that if one of us dies (a pretty safe bet), there would be no attempt, absolutely no interest, in finding another companion. This relationship has been so complete and satisfying that its power and memories would make searching for another quite pointless.

I can't think of anything else that could speak so fully to the power of a lasting relationship. Being alone would be preferable to being with someone else. Being alone would be the willing choice each of us would make. Our faith tells us we will be together again. Until that time, we would patiently wait and remember.

Before 2016 gets too much older I thought it a good time to declare my love for my wife and everything she has meant to me. Here's to a great year together, sweetie.