Financial Dangers Women Face

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She raised two children as a single mother in the 1960s and '70s while working in the public relations industry in New York City — but never at a very high-paying job. She never saved anything for retirement, and even though two employers offered pensions, she chose to take her benefits as a lump sum when she left those jobs, rather than wait for the lifetime monthly payments that would have started at retirement age.

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"I spent whatever I earned, despite some very good advice from lawyers, accountants and my father," she recalls. "I somehow never put money away, and I spent what I made. If I had a good year I took a vacation or took the kids on some wonderful trip."
Later in life, Brickman ran her own PR firm and then was a self-employed teacher and freelance writer; she waited until age 65 to file for Social Security to avoid penalties for early filing and continued part-time work. But she had no savings, a mortgage and a heap of credit card debt.
Something did "work out" for her shortly after that, when she inherited $250,000 from an uncle — money she used to retire her debt and to buy an income annuity. Now in her early 70s, Brickman receives $2,300 a month from Social Security and the annuity, plus some income she earns writing and teaching.
It's enough to get by in many parts of the country, but doesn't meet the $4,000 per month she needs to live in Manhattan, even without the mortgage. "I could be the poster girl for the fact that women — even smart ones — are very bad financial planners," she says.
National Problem
Unfortunately, Brickman's brush with retirement disaster is all too common among American women — and the recession is worsening the outlook. Women earn less over the course of their lifetimes than men, which reduces their contributions to Social Security and funds available for retirement savings. Motherhood often interrupts careers. And women tend to be more conservative investors than men, which often means their portfolios don't grow as quickly when they are young — a time when they should be investing aggressively.
Even for middle-class or affluent women, the risks are high.
According to the Social Security Administration, in 2008 17 percent of unmarried women age 65 or older had income below the official poverty threshold of $10,326; 28 percent were considered near-poor, with income below $12,907.
The yawning gap in retirement security widened during the recession. A survey of nearly 3,600 American workers conducted for the Transamerica Center for Retirement Studies by Harris Interactive shows:
• Women are losing confidence that they'll be able to retire comfortably; just 6 percent said they were "very confident," compared with 9 percent in 2007, before the recession began. (Ten percent of men were "very confident, compared with 16 percent two years earlier.) And only 33 percent of women said they were building an adequate nest egg, down from 41 percent.
• Although a slightly higher number of women had access to a workplace retirement plan in 2009 (68 percent) than two years ago, the percentage actually participating fell to 70 percent — down from 78 percent in 2007. And they participated at a far lower rate than did men (82 percent).


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