A new report published in the Reuters discloses the problems women can face with early retirement. Women retire two years earlier than men while they live five years longer.
This time calculation error needs to be fixed. Women cannot cover the longer span of time with the money they have in hand.
Most women take early retirement because of caring for a sick spouse or tending the grandchildren, a study in Fidelity found out.
The certified financial planner Abe Ringer highlights the situation of a 63-years old woman who took immature retirement because of her ailing husband. He died of lung cancer and she, then, focused on caring for her grandchildren making it easy for her daughter to work.
Any retirement, whether timely or immature, is shadowed by some sort of uncertainty. The study finds that a woman needs 147,000 for health care after retirement while a man needs only 133,000 excluding long-term treatments. Other key expenses include coverage.
How Elderly Women Keep Financially Stable
To keep the cash flow incessant, women can make strategic decisions at several points:
Keep Connected to the Work
Women save less. Merrill Lynch found in a study titled “Women and Financial Wellness” that women spend 44 percent of their working-age away from their jobs! This creates a potential gap in wages which is over $1 million.
Women can cover this gap if they seriously consider the long-term impacts of not working regularly. They should try to keep connected to their jobs.
Abe Ringer suggests part-time as a powerful work option. The advisor gives the example of a woman who retired at her early 60s to tend her retired ailing old husband. Now she is concerned about her funds depleting fast. Ringer advises her to choose consulting projects and work on them.
The example of starting over has startled Catherine Collinson the president of the Transamerica Center for Retirement Studies. She finds them inspiring how they do part-time work and demonstrate their skills.
Analyze Cost-Benefits of Things When Deciding an Early Retirement
Women are responsible for two-thirds of total care that they provide to the elders of a family. Stuart Ritter suggests that women can divide the care among the elders of the family or they can choose one caretaker. In this case, the other members should resource her in return for her care services. He is a senior financial planner at T. Rowe Price. Another possible option according to him is that the entire family can invest in a long-term care policy of an ailing family member and cover the care expenses with insurance.
It is Better to Rationalize about Early Retirement
When women face hard decisions concerning money, they should search for other solutions before turning to the pension or social security at an early age. There are other accounts that you can draw off. Claiming pension at an early age is not a good financial decision, according to Abe Ringer.
Homeowners, needing money urgently, can sell their home. The reverse mortgage is also a good way to cash out of the residence while living in it. Ringer says that payments can be converted into allowance and can become a steady source of income.