The Perilous Paradox: Women, Retirement, and the Extra-Long Life

Women who take charge, do the math, plan for contingencies and work with their partners and/or financial advisors have a better chance of securing their finances in retirement than those who shrink from the process, according to a new study from the MetLife Mature Market Institute.

The MetLife Study of Women, Retirement, and the Extra-Long Life: Implications for Planning shows women face a number of unique risks — including longevity, aging single, lower retirement incomes, greater healthcare costs and added caregiving responsibilities — and have not planned adequately to address these concerns, leading to a significant shortfall.

The study examines the thinking and practices of mature women, ages 50 to 70, in the context of the “extra” challenges they may experience in retirement. According to the report, women expect to live until age 85, some until age 90, and are more concerned than men about affording health care, long-term care and outliving their assets. Yet, slightly more than half of the women surveyed know the likely amount of their retirement income/assets and only 44% have calculated the amount of their essential expenses. Approximately one-in-six (16%) reported that they have or plan to delay retirement, on average, four years.

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The data suggests that women who work collaboratively with spouses, partners, financial advisors and even knowledgeable friends, report higher confidence in their retirement security. It shows that those who employ what is known as the “Three Cs” approach: Communication + Compatibility = Confidence, have better results. Among men and women, men are more likely (65% vs. 55%) to calculate retirement income.

“The combination of risks for women and their relatively inadequate retirement planning has become known as the ‘perilous paradox,’ but the message is clear that women are able to avoid that,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “The risks and costs of ‘living long and living female’ call for an ‘affirmative action’ plan. We find that those who plan for a steady stream of income, along with some flexibility for the unexpected, are best prepared for what can be an extended future.”

Kathryn B. McGrew, Ph.D., research fellow at the Scripps Gerontology Center at Miami University, said, “For themselves and their families, women can do a better job of taking charge, planning for contingencies, gathering information, calculating their income/expenses and getting serious about retirement strategy. Their spouses and partners can do their part by engaging in a joint strategy that serves the interests of both parties with various retirement scenarios. They should give particular consideration to the fact that most women will outlive their spouses.”

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The Perilous Paradox: Women, Retirement, and the Extra-Long Life

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