Full Speed Ahead

When the Great Recession began, Lisa lost her full time job. When it ended, Pete and Lisa’s stock assets were wiped out.

Then Pete got sick and he had to go onto workman’s compensation. Lisa found a part-time job, but Pete’s new medications compounded by their severely reduced income decimated their savings.

Before long they fell behind on their mortgage payments.

Pete couldn’t go back to work and had to retire. Rather than lose the house, Pete took the one-time lump sum payment instead of a monthly annuity.

Six months later Pete relapsed and passed away.

Lisa was overcome with grief while having to make sense of their finances which in the best of times was incomprehensible and now in the worst of times was beyond mind boggling. Lisa tossed and turned at night trying to figure out what to do with the house, Pete’s dwindling pension, the now reduced two to one SSI checks, and her own pathetically small retirement savings.

Lisa’s son arranged for her to meet a financial advisor who specialized in helping women with their finances while they transitioned through the death of a spouse. On their first few meetings, Lisa told her advisor that she didn’t have a clear understanding of her finances and that she felt incapable of coming up to speed during this traumatic time.

She later confided to her that she didn’t know how or when she could retire or how she was even going to continue paying the monthly bills. She even admitted that if she had participated in the planning all along, things would have been a lot easier for her now.

Her advisor responded that, “women are treated as second class citizens when it comes to financial planning.” She quoted a recent UBS survey which reported 55% of women older than 50, and 59% of women ages 20 to 34 let their spouses handle all finances beyond paying the monthly household bills.

When they eventually fired up the computer and started crunching numbers, Lisa was terrified of what they would uncover. When all the computations were done it showed that Lisa’s part-time job, combined with her now single SSI payment came in around 18K per annum.

Lisa gasped at this low amount but she was even more surprised to hear that 18K was the median yearly income for most retired women 65 and older.

Once they factored in Lisa and Pete’s pensions and established a household budget and Lisa’s projected longer-term needs, it became evident that the house had to be sold if Lisa planned to retire any time soon on more than 18K annually.

Lisa absorbed the news and took on a new attitude. She stopped being reactive and started becoming proactive regarding the planning and management of all her finances. Lisa sold the house, but even with the proceeds, her advisor informed her that she could no longer support the lifestyle she had when married.

A one-bedroom apartment and counting her pennies was going to be Lisa’s new financial reality. As Lisa digested the news, her advisor told her that, “she was one of the lucky ones.”

Lisa was more than skeptical about her supposed “good fortune” until she was handed the 2016 study, “Shortchanged in Retirement,” which reported that retired women have an 80% more likelihood than men to be impoverished at age 65 and older.

Lisa is now making the best of things. As unfair and inequitable as it truly is, Lisa can nevertheless enjoy a dignified retirement free from being reliant on handouts from her kids or social welfare services. Sad as it might seem, by today's harsh and discriminatory standards, Lisa is in fact “one of the lucky ones.”

To think that being “one of the lucky ones” means having your lifestyle radically revised for the worse seems both unwarranted and downright cruel.

In the next and final column on retirement inequity we will examine some much needed changes on both a personal and societal level to even out this playing field. It’s high time for us to move FULL SPEED AHEAD getting women out from behind the retirement eight ball.

Allan Goldstein is a retirement coach and Long Beach resident.

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