Caregiving

Financial Challenges Facing Women

An expert weighs in on the unique issues women face when planning for retirement.

For nearly three decades, Cindy Hounsell, who is president of WISER, the Women’s Institute for a Secure Retirement, has been leading the charge in helping women secure their financial futures. Hounsell, a lawyer and retirement expert, testifies before Congress, trains advocates around the U.S., and writes and speaks widely on the need for women to prepare for retirement. In this lightly edited conversation with Associate Editor Mary Kane, Hounsell elaborates on women’s challenges, including the complications of caregiving, the financial literacy deficit and the impact of widowhood.

Women are more likely to take on the role of full-time caregivers. What is the financial cost to them?

When I first started doing this, caregiving advocates would say to me, “People love their caregiving job. They do this because they love their parent. You can’t talk about finances.” But I started talking about it. I’d do events with aging advocates and people would come up to me afterward, like a schoolteacher who said, “I quit my job with benefits to take care of both parents, and now the state is taking the house for all the money they owe. I’m 64 years old. Where am I going to get a job?” A lot has been written about this. You’re not going to get another job with benefits. These people have nothing left because someone they loved got sick. I think a lot about them.

What are some of the ideas being considered to support caregivers?

We are talking more about family caregiver agreements. Families are beginning to understand that caregiving has to be about more than just one person. We’re beginning to hear that the other siblings are pitching in financially. I’ve even seen examples where the other family members bought the family house for the sister who quit her job to do the caregiving.

What’s interesting is that we also see a lot of younger women who are daughters quitting their jobs to be caregivers for their parents. But we’re hearing from a number of older women who tell them don’t quit your job. You’re sacrificing something for a responsibility that needs to be shared with the rest of the family.

What role does financial literacy play in retirement planning, especially for women?

You have to educate yourself. You have to learn the language. You have to be on the lookout for every source of income you are counting on in retirement, and you have to be sure the accounts or insurance will actually be there for you. You need a financial planner or a financial counselor to go through all that with you, or at least ask those questions. And we don’t believe it’s ever too late to start planning. If you’re living in a big house and you can’t afford the taxes, then you need to think about moving. You have to do something. There are still decisions you can make so your retirement life will be easier.

How should women prepare for their financial lives when they become widows?

Over the years, I’ve heard story after story about widows not getting survivor benefits or pension benefits they should have had. They didn’t sign up for it properly, or they didn’t handle it correctly in a divorce. They leave money on the table that they are going to need. We urge women, and the children of these women, because they are going to end up with some of that burden, to start talking about this.

What are some specific strategies older women can consider to prepare for a more secure retirement?

People say you should really work to age 70. If you think you can’t and you are pushing to get to age 66 and get your full benefits, maybe try staying at your job at least another year or two. Or if you can’t put the maximum each year into your IRA, at least put a little bit in. These are hard decisions, but there are things you can do. Don’t just say you don’t want to deal with them, and do nothing.

Most Popular

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs
Coronavirus and Your Money

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs

People have lots of questions about the new $3,000 or $3,600 child tax credit and the advance payments that the IRS will send to most families in 2021…
May 17, 2021
Thinking of Buying an RV or Motor Home? Think Again!
personal finance

Thinking of Buying an RV or Motor Home? Think Again!

A Lemon Law attorney has some insights on the downsides of RV ownership you should think about before putting your money down and hitting the road.
May 16, 2021
2021 Child Tax Credit Calculator
Tax Breaks

2021 Child Tax Credit Calculator

See how much money you'll get in advance under the new child tax credit rules for 2021. Payments will start July 15.
May 17, 2021

Recommended

Today is the Last Day to Fund Your IRA and Cut Your Taxes
Tax Breaks

Today is the Last Day to Fund Your IRA and Cut Your Taxes

Although you need to act quickly, you still have a few hours to make a 2020 IRA contribution and lower your tax bill.
May 17, 2021
Contributing to Your HSA Today Could Lower Your Tax Bill
Tax Breaks

Contributing to Your HSA Today Could Lower Your Tax Bill

If you haven't already contributed the full amount to your HSA for 2020, you have a few more hours to do so and potentially reduce your tax bill at th…
May 17, 2021
33 States with No Estate Taxes or Inheritance Taxes
retirement

33 States with No Estate Taxes or Inheritance Taxes

Even with the federal exemption from death taxes raised, retirees should pay more attention to estate taxes and inheritance taxes levied by states.
May 13, 2021
13 States That Tax Social Security Benefits
social security

13 States That Tax Social Security Benefits

You may have dreamed of a tax-free retirement, but if you live in these 13 states, your Social Security benefits are subject to a state tax. That's on…
May 11, 2021