Posted on 08 October 2012
By Mark Miller
Women face distinct retirement-planning challenges, including higher longevity risk, less access to workplace retirement plans, and continued wage discrepancies.
Now, author and retirement expert Jan Cullinane offers a book focusing solely on the issues and challenges confronting single women in retirement. The Single Woman’s Guide to Retirement (John Wiley & Sons) will walk you through the challenges of retired or pre-retired life, from managing your finances to staying healthy in body, mind, and spirit, dealing with divorce, and even looking for love or work. She also includes real-life stories of women who have gone through this critical life transition.
I recently posed five questions to Jan about the new book.
Q: Why a book about single women and retirement?
A: There are more than 25 million single (never-married, divorced, widowed) women over the age of 45 in the United States, and this number is growing. And, even if you’re happily married now, there’s an 80 to 90 percent chance that if you’re a woman you will be single at some point.
The time is right for a book for this huge and growing demographic — one that addresses all aspects of retirement: working, caregiving, boomerang kids, dating, death, spirituality, deepening connections, life-long learning, money matters, relocation, health, volunteering and travel. Until now, there was no book with this holistic approach. In addition to including worksheets, references, and statistics, I solicited lots of input from many single women, so the book is a blend of practical and specific information, anecdotes, examples, worksheets, and references.
Q: What is special about single women as a demographic?
A: It’s fairly common knowledge that, in general, women live longer than men, make less money than men, are over-represented in lower paying jobs, are in and out of the workforce more often, collect fewer and smaller pensions than men, and that single women will have to work longer since they don’t have a “back-up” for income.
They also receive lower Social Security payments, and their nest eggs tend to be about a third smaller than men’s. And, by not negotiating a first salary – and women are less likely to negotiate than men – women make as much as $500,000 less over their careers than those who do negotiate a first salary. So, single women are dealing with the triple whammy of less money, longer life spans (not that that’s a bad thing!), and no supplemental income from a spouse.
Q: What about working after a primary career?
A: Most of us are familiar with the fact that the majority of people plan to work past their traditional retirement age or work part-time in retirement, both for financial and psychological reasons. This is all well and good, but now there is data that reflects what is really happening– I call this Expectations vs. Reality. If we look at the 2012 Retirement Confidence Survey by the Employee Benefit Research Institute, it reveals that half of retirees left the workforce earlier than planned, and it wasn’t because they were getting some big buy-out or a windfall inheritance. It was because they or family members had health issues, became disabled, were “rightsized,” or their company went out of business. And, although 70 percent of current retirees said they planned to work in retirement, only 27 percent actually did.
So, it’s obvious that continuing to work won’t be the answer for most people, although it’s a solution for some people, and I do include a lot of suggestions for working on your own or for others.
Q: A few financial thoughts?
A: The book provides lots of sound advice, as do you, Mark, about maximizing Social Security benefits, saving for retirement, figuring out retirement expenses, purchasing long-term care insurance or not (if the premiums exceed 5 percent of your income, you probably can’t afford it), and separating wants from needs.
I also discuss having a roommate (about 40 percent of women in an AARP survey said they would consider having a non-romantic roommate; this can go a long way toward lowering costs in retirement); downsizing and moving to a less expensive location, and using creative methods to stretch your money (such as home exchanges for travel or volunteering where your lodging and food is provided). There is also a list of at least 20 easy-to-institute changes that will help make single women’s money last as long as they do.
Q: What about single women and relocation?
A. Most communities seem to target couples in their advertising, but single women are the second largest contingent of homeowners, purchasing 20 percent of homes, according to the National Association of Realtors. The book includes real stories from real single women explaining specifically where they purchased a home, and why it works for them. Single women talk about moving to co-housing communities, active adult communities, new urbanism communities, master-planned communities, living in an RV, relocating to a city or a small town, choosing a college town, moving abroad, or deciding on a CCRC (continuing care retirement community).
In the end, retirement can be both exciting and scary, an opportunity and a challenge. The book is designed to be a helpful, easy-to-read guide for those approaching this new phase of their lives.