Imagine that you are a 62 year old woman approaching retirement with no saving. You have some debts but the repayments are manageable and you are proud to have stayed solvent your entire life. Suddenly your partner dies, or decides he wants a divorce, and you find yourself unable to meet all your financial commitments. Your only option is to file for bankruptcy.
This might sound fanciful but it is a situation faced by increasing numbers of older women. According to a report in The Guardian newspaper, the rate of insolvency among women over 65 has been rapidly increasing in the UK – by a whopping 88% between 2008 and 2018. Often it is sudden and unexpected life events, such as a spouse passing away, a divorce or a serious illness, that trigger a financial crisis which can quickly decline into insolvency.
Older women are far more likely to experience financial precarity than older men. A major reason for this is that typically they accrue fewer financial assets and resources in their own right. Some of today’s 60 something women have never worked at all, which means no workplace pension to top up measly state pensions. They may also have been excluded from financial decision making, which has traditionally been seen as a man’s domain, and therefore lack the knowledge to manage finances effectively.
Even women who have had active working lives still often find themselves financially disadvantaged compared to their male peers. Even though unequal pay for men and women is illegal in many countries, such as the UK, the gender pay gap is still very much alive and kicking in the 21st century. Women not only earn less than men but they are also far more likely than men to work part-time, work in lower paid jobs and take a career break to raise children, missing out on career advancement opportunities and working years to contribute to a pension.
And let’s not forget that we women are also very good at sacrificing our own futures for the benefit of others. I’ve seen many cases of women in their 50s putting themselves last when faced with the financial squeeze of providing for ageing parents and supporting our children. With the direct result that they end up with no savings or pension to fall back on later down the line.
It must be devastating to have no choice but to declare yourself bankrupt at any age but for women in their twilight years, with few or no working years to recover, it is a life sentence from which there is no bouncing back.
This is one reason why I am passionate about educating women of all ages about the importance of saving for retirement. Whether you’re in your 20s, and retirement feels forever away, or your 40s, when it is starting to appear on the horizon, saving into a pension pot should be a priority! Starting your nest egg early will give it optimum time to benefit from compounding which will grow your wealth.
50 somethings will be finding retirement increasingly difficult to ignore. Perhaps you are starting to panic about having neglected your financial planning? Maybe my comments about not prioritising your own financial future resonate with you? I’ll be honest, you’ve left it late but it’s still not too late. It’s time to start saving aggressively. The priority now is YOU!
I highly recommend sitting down with a professional to drill down into some concrete figures to show you how much you will need to survive when you retire. In fact it’s crucial that you do this. If there is going to be a shortfall, it’s best that it is flagged as early as possible to give you choices about how to cope with it – working longer, compromising on your retirement plans or downsizing.
Your 50s are not a time of life to take big financial risks – more than ever you need a diversified portfolio which won’t jeopardise your savings. An experienced financial adviser will be able to advise you on how best to maximise return with carefully chosen investments and limited risk.
Contact me for a non-obligatory chat at lcalver@infinitysolutions.com today!
Over the years I have helped hundreds of clients organise their finances. For me, financial planning is not limited to a single piece of advice and then moving on as is common in the industry. Instead, I like to build long term relationships and help people manage their finances to meet their needs as circumstances change. As a result, many of my clients have been with me for a number of years. They live throughout Asia and further afield but know that I am only a Skype or telephone call away.
