Recently I wrote in this blog about educating Generation Y and X women on retirement and I suggested that the Department of Labor create an app to go along with its Wi$e Up financial literacy website for young women. After further digging, I came across a a few iPhone apps (titled Women, Wealth and Wisdom) that help young women envision their retirement and start planning today. So I thought I’d give one of them a test drive.
The app is Women, Wealth and Wisdom Retirement Income Calculator created by AXA Equitable Financial Services back in 2009 as part of a suite of financial apps for women. The app does what it’s supposed to do, nothing more and nothing less. Users can type in some basic information about their retirement savings and the calculator spits back some estimated answers to questions like “How much money will I have to spend each month of my retirement?” Users can adjust things like rate of return and years of retirement.
Although not particularly specific to women, I found this app to be functional and generally helpful in answering the basic questions. There was one minor oddity, though. The default answer for the “current age” section of the form is 60. Yikes! I thought we were trying to get women to start planning for retirement early? Still, unlike your real retirement numbers, the defaults in this app can be easily changed.
This frightens me. In a recent survey, only 10% of working women surveyed felt confident that they had enough saved to live comfortably in their retirement. True, the downturn of the economy has created uncertainty for everyone—those who are working (and the millions who are not). But before you blame the economy, in 2008 women’s confidence level was just 14%. Good or bad economy, this is an unbelievably low number, and it echoes a confidence crisis we’ve blogged about before.
Women are more likely to live longer (and as a result have higher healthcare expenses during their retirement years), not have a pension, and sorely underestimate how much they’ll need in retirement. Women are more likely than men to think they’ll be reliant on Social Security but then women are more likely to believe the value of this benefit as it’s provided to retirees today won’t be available to them. Can we fix this problem in the next generation? How can we educate our youth and, in particular, the young women of this country? In doing research on this topic, I came across a website targeting the Generation Y and X women, managed by the U.S. Department of Labor (DOL). It’s a start. Readers may also be interested in this special feature from the Wall Street Journal.
Hey, DOL! There’s a surefire way to get the attention of young minds these days … create an app for that!
The Society of Actuaries has released a new report looking at unique retirement challenges facing women. Here is an excerpt from the press release:
While half of women at age 65 will likely live beyond age 85, 92 percent of female retirees and 89 percent of female pre-retirees do not plan far enough in the future to cover this 20-year period. A new report from the Society of Actuaries (SOA) highlights these gaps in planning and offers an actuarial perspective on techniques for addressing these retirement concerns. The report, The Impact of Retirement Risk on Women, identifies findings from the 2009 Risks and Process of Retirement Survey Report, and focuses on issues in the survey specifically as they relate to retirement concerns for women.Given the fact that women outlive men on average by three or four years, women need to better plan for various risks, such as inflation, outliving assets and the need to cover long-term care costs. Despite similar perceptions of retirement risks between men and women, actuaries caution that the affects of risks on women can be quite different, and therefore an understanding of post-retirement risks women face is particularly important. For example, the expected average value of the cost of lifetime long-term care services is $29,000 for males and $82,000 for females, in 2000 dollars, which highlights the need for women to better prepare for the risk of incurring long-term care costs in retirement.
The full report is available here.