For Vadale James, a wellness counselor in Winston-Salem, North Carolina, being single is fine. This is especially true now that I am helping care for my parents who are in their 80s.
But what bothers her is what her life will be like when she reaches their age.
“I moved here from Washington, D.C., six years ago to help my parents, and since then, my retirement savings priorities have taken a bit of a backseat,” the 51-year-old tells Yahoo Finance. Ta. “I feel like I’m way behind the eight ball right now and I’m totally unsure of what my future holds.”
There will be 43.5 million single adult women in the United States in 2022, up from 37 million a decade ago, according to the latest statistics from the U.S. Census Bureau. This is the highest level on record, and for many of them, like James, the risk of running out of money in retirement is a serious concern.
Triple threat to retirement security for single women
Here's why single women are uniquely vulnerable. This is due to a combination of longer life expectancies and persistent wage disparities when compared to men, as well as fewer years of work due to caregiving time-outs, all of which can set back partners' earnings. Because there isn't. rely on
“Single women have no one to turn to when it comes to money,” says Cindy Hounsell, president of the advocacy group Women's Institute for a Safe Retirement (WISER).
Now, several new research reports are shedding light on the precarious state of their financial security and retirement savings.
Let's start with the wage gap. According to the National Women's Law Center, women in the United States earn $0.84 for every dollar earned by men.
This will reduce the amount of money you can set aside for retirement. Additionally, many women tend to take time off from work to care for children and family members, which often means pausing contributions to their retirement plans. This, combined with salary issues, will lead to a reduction in future social security costs.
According to the Social Security Administration, the average monthly retirement benefit for retired men age 65 and older was $2,020 in 2022, compared to $1,638 for retired women of the same age.
Additionally, a 2023 report from the Transamerica Institute found that nearly a quarter of female workers are not offered severance benefits by their employers, compared to just 16% of men. This discrepancy is due in part to the fact that women are twice as likely as men to work in part-time contract jobs and that many employers do not provide severance benefits to part-time employees. Thing.
The challenge is even more acute considering that women tend to live nearly six years longer than men, according to the Centers for Disease Control and Prevention. That means women have to survive longer with far less money.
See related articles: Planning for Retirement: A Step-by-Step Guide
“Assets have decreased significantly”
A recent analysis by the Federal Reserve Bank of St. Louis shows that the gap between rich and poor is stark between unmarried women and men. The study focused on unmarried adults (23%), who remove outside sources of wealth that may come from divorce or bereavement.
In 2022, the inflation-adjusted median household wealth for unmarried women was $19,200, compared to $28,100 for men in the same group. These women had $0.68 for every dollar of wealth owned by men, which was much higher than the broader gender income gap of $0.90.
The data also reveals racial disparities among women. The median wealth of unmarried white women is $31,000, nearly 10 times that of black women. Median wealth for unmarried white men was $40,000.
Student loans and single women
Starting saving for retirement early can make a big difference, but for many women in their 20s, debt can be a barrier to getting started.
Women carry an average of $31,276 in student loan debt and end up paying $307 per month in the year following graduation.
In fact, according to an analysis by the American Association of College Women, women take about two years longer to pay off their student loans than men. The reason is that they are paid less than men. From the moment women graduate from college, most women face a gender pay gap that widens as they get older.
As a result, some women may put off saving for retirement, and given the power of compounding and dividend reinvestment, delaying even a few years can make a difference decades later. may occur.
Hounsell added that many single women think they'll just work longer if they save later. “But you might not be able to work as long as you expected,” she says.
read more: Tips to pay off your student loans faster
Impact of nursing care on savings
Nursing care is an important issue. Overall, women are more than twice as likely as men to take time off from work for a year or more to care for children or elderly parents, according to a new Goldman Sachs study titled “Challenges Women Face When Saving for Retirement.” It is said that
According to this data, 40% of working women reported quitting their jobs to care for children and 21% reported quitting full-time work to work part-time to care for family members. are doing.
“Single women may have to step away from work to help their parents,” Kimberly Davis, author of “Fiscal Feminist: A Financial Wake-up Call for Women,” told Yahoo Finance. For them, it's the only game that allows them to save money for retirement. ”
Women “are not only programmed to be caregivers, but they are also programmed to take financial risks and put others before themselves,” she says. “And at some point we have to learn that we need to be a little more selfish.”
Her tip: Women with enough income should open a taxable brokerage account and make it automatic investing. “Whether it's just $250 a month or $100 a month, it's to make that habit stick and see your account grow,” Davis says. “Because taxable accounts are just as important as retirement accounts.”
I have knowledge but I don't have confidence
Only a quarter of single women have a retirement account, compared to half of married women, according to data from New York Life Wealth Watch. And two-thirds are unsure whether their retirement savings will last a lifetime. At the same time, 6 in 10 feel very or somewhat knowledgeable about saving for retirement.
James is now part of that knowledgeable crew. “I had to change my job so I could spend time with my parents, which was great, even if they were few,” she said.
Although her decision meant a significant reduction in her salary, she did not stop saving in a retirement account. “I’m not sure how much I can do, but I’m adding money every month,” she said. “If I earned more, of course I would save more.”
She admits she still has regrets. “I remember when I was 21, my mom sat me down and said, 'If you put money in a retirement account now, you'll be 30, 40, 50, 60. This is what it's going to be when you get to it.'' Of course, it went in one ear and went out the other, and I've been saving it over the years, but it's never been consistent. Looking back now, I wish I had taken her advice.”
Kelly Hannon is a senior columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 of her books, including “The World's Best.''Taking Control Even Over 50: How to Succeed in the New World of Work.” and “You’re never too old to get rich.” Follow her on X @Kellyhannon.
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