Women Live Longer Than Men, and Should Plan Accordingly

Women are outliving men by an average of 5 years. Women make up almost 60% of the population over age 65, and almost 70% of the population over 85 in the U.S. Many of those in retirement are women, so Financial Planning Association offers some retirement planning advice geared specifically to the sex who lives longer.

• A woman should set aside more money leading up to retirement and be sure that withdrawal rates are sustainable because women are often planning for what will be a longer retirement.
• A woman should invest aggressively enough to overcome inflation, but not too aggressively so that she wipes out the principal. The goal is to maintain a balanced portfolio.
• A married woman should consider arranging a plan with her pension provider that will base benefits on her life and her spouse’s life as opposed to just the husband’s life. “Joint Life” benefits may be smaller than if payments were based on a single life, but they protect from negative impacts of the husband predeceasing the wife. If he dies before the wife, payments likely cease upon his death.
• If a husband’s death would create a significant hardship on a woman, then the husband should probably get life insurance to cushion the loss of his incomer upon his death.
• Long-term care insurance can be a good idea to preserve limited assets when a woman has to pay for medical care of a spouse that is not covered by health insurance, Medicare, or Medicaid. Long-term policies can also cover the same type of expenses for a woman if her husband passes away. It could minimize burden on remaining family and friends, and also help get a woman into a facility of her choice.
• Because a woman will likely live longer to update planning and exercise powers of attorney, a woman should pay close attention to a family’s estate planning and be sure that beneficiaries and plans are up to date and accurately reflecting her wishes or the wishes of her and her husband as a couple. 

See Joseph R. Hearn, Women: Don’t Let the Death of a Spouse Derail Retirement, FPA Newsletter, Apr. 10, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.