Women want to live longer — but are afraid to outlive their wealth

The prospects for financial independence and self-reliance get dimmer with age, especially for women

Women want to live longer — but are afraid to outlive their wealth

An ever-growing life expectancy is one of several factors projected to complicate retirement plans for people in general, but new research suggests that the fairer sex may stand to face an unfair share of retirement-planning problems.

Age Wave, a US-based consultancy and think tank, and Merrill Lynch recently conducted a nationwide study of American women. The study, titled Women and Financial Wellness: Beyond the Bottom Line, found 64% of respondents would like to live to 100, but fear they’ll run out of money if they do live that long.

“Not only did women say they fear running out of money for their one-hundred-year life, 42% say they are afraid they’ll run out of money by age 80,” said Age Wave co-founder Maddy Dychtwald in an article for the Wall Street Journal. “That’s a real problem, since the average life expectancy for a woman [in the US] is already age 81.”

The problem is compounded by the fact that women tend to outlive men, and the ones who get married tend to be younger than their husbands — which means they also often have to provide and spend on care for their aging spouses. That spells trouble for the majority of women who wind up single and needing to be financially self-reliant in their twilight years.

“These extra years can come with a heavy price tag—women’s average out-of-pocket retirement health-care and long-term-care expenses are a whopping US$194,000 more than men’s,” Dychtwald said.

When asked how far into the future they’ve mapped out their financial plan, a quarter of respondents said they have not planned at all. The situation may be worse in Canada, where a recent Financial Planning Standards Council study of women found that over half had no written financial plan.

The Age Wave study also found 63% of women ages 18 to 29 said financial planning is “too difficult to even think about,” even though 84% anticipate they’ll have a heavier burden in paying for their retirement than their parents did.

The top regret cited by the women surveyed was not having invested more of their money; on a related note, the survey found that investing was the only one among several financial tasks that women were less confident at (52%) than men (68%). Among the women who did invest, 77% reportedly felt that they will be able to save enough money for the rest of their lives.

“The message is unmistakable: Everybody, but women in particular, need to make it a priority to fund their future needs,” Dychtwald said.


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