A man is not a financial plan



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Many Americans continue to be unprepared financially when it comes to retirement planning, as evidenced by one of the lowest savings rates (4.9 percent) in the developed world, according to data from the Federal Reserve.This is despite the government's latest revisions to the dates Medicare (2024) and Social Security (2036) are expected to become insolvent. With that in mind, it would be smart for Americans to put an investing and savings plan in place that does not rely primarily on government programs.It would be especially prudent for women to do so.Social Security is particularly important to women, currently providing 51 percent of elderly unmarried women's -- including widows' -- total retirement income. To put this in perspective, unmarried elderly men get 39 percent, while elderly married couples get 36 percent of their income from Social Security. Unmarried women are especially dependent, given that Social Security is the only source of income for 25 percent of them. The elderly poverty rate among women would have been 52.2 percent and among widows would have been 60.6 percent had it not been for Social Security.Many studies show single women, particularly mothers, have a significantly higher risk of living in poverty than married women. Women live an average of seven years longer than men. They typically earn less than men and their retirement benefits are consequently lower.Social Security Administration research shows that divorced and never-married women are increasing as a proportion of elderly women. This trend is expected to accelerate as waves of baby boomers continue to retire.There is also an increasing trend toward "late-stage divorce" by baby boomers. Data from The Office of National Statistics show that the overall rate of divorce in the United States is dropping within every age group studied except those over 60. Some attribute this to longevity and the increased potential for couples to grow apart. Women in particular need to be aware of the financial impact of divorce. Of single women heading families with children, more than 40 percent are now living in poverty.Better positionedHere are some tips on how both married and single women can better position themselves financially for the future: • For married couples, focus on the three C's: Communication, collaboration and cash flow. Lack of effective communication on saving and spending priorities can be a leading cause of divorce. However, couples who collaborate to achieve family goals and partner in managing the family's finances can have stronger relationships. Managing your cash flow through proper budgeting and saving can contribute to your peace of mind. • If you are faced with divorce, make a financial adviser one of your first calls. Division of family property is usually one of the most contentious aspects of divorce. Financial advisers can help calculate a fair and equitable division that can lead to a smoother separation. • Establish credit, savings and retirement accounts in your own name. Having separate credit is essential in the event you divorce or become a widow. • Set a per-paycheck savings goal for yourself and set up automatic deposits into retirement and investment accounts. If you need assistance in goal-setting, meet with a financial adviser who can help you plan your cash flow in retirement. • Make sure you have a long-term care strategy in place long before you need it. Women live longer and have a higher probability they will need long-term care. If a husband becomes ill first, his care might deplete family assets, leaving little or nothing available to care for the surviving spouse. Medicare rarely covers long-term care services, so it's important to have a plan for both spouses. A long-term care strategy is even more important for single women.It's important for women to become more financially literate and to be an equal partner in managing family finances. Seek financial education online, from your library, at local free seminars and by joining free financial literacy groups like the Southern New Hampshire Money Club. The club, which has been in existence since 2006, is a free program of the nonprofit Women's Institute for Financial Education (Wife.org) dedicated to improving women's financial literacy.Mary Carroll Murphy, a Nashua-based independent branch leader with Charles Schwab, can be reached at 603-595-0438 or mary.murphy@schwab.com. Edit ModuleShow Tags