Money - A Guide for Women over 50
For many women over 50, financial concerns are a daily reality. Balancing present-day needs with future plans can be challenging, and the added pressures from the pandemic have only intensified these worries. This article delves into the financial health issues facing women in this age group and offers insights on how to navigate these concerns with confidence.
The Impact of the Pandemic on Financial Health
The pandemic has left a significant mark on the financial well-being of adults over 50, with many experiencing a decline in their finances since its onset. Responding to a poll run in our online group - Empty Nester Women Looking to Relocate - a staggering 43% of women stated they were “worse off’ financially after the pandemic than they were before. (39% said their financial situation remains “unchanged”, while 18% say it has ‘improved”). Other research sources show the decline in financial wellbeing is particularly pronounced among those with lower incomes, and those between the ages of 50 and 64. Employment disruptions during the pandemic have exacerbated financial instability.
Financial Anxiety
Women - particularly those who are divorced, separated, or widowed, and those with lower incomes, -are considered vulnerable, as they are more likely to experience financial anxiety. The survey revealed that 78.8% of respondents live on personal incomes amounting to less than USD71k/ annum. Almost half of all respondents (45.3%) are making do on personal incomes under $50k/ annum.
Financial Security
Confidence in financial stability during retirement is worryingly low as there’s a lack of financial cushion to alleviate the shock of emergencies and covering medical expenses.
Just 8.2% of respondents stated they feel "financial stable" with a healthy nest egg to see them through their retirement years. An additional 26.3% think their savings should be ‘sufficient’ and they ‘should be ok’.
That leaves 65.5% in a potentially precarious position, should cost of living pressures continue to increase, and heath continue to decline, which it tends to do with age.: 11.3% with ‘no retirement savings’, 31% with a’ small but insufficient amount’, and 23.2% with a ‘modest amount’ yet they ‘will need to budget carefully’.
Dominant Financial Concerns
The risk of prices rising faster than income is the foremost financial worry for women over 50. Some 57% of survey respondents run in the Facebook group Empty Nester Women Looking to Relocate in July 2024, expressing concerns about cost of living pressures, with a further 28% pointing to insufficient savings being their primary source of financial stress.
Key Statistics
The following statistics are based on survey responses from members of the Empty Nester Women Looking to Relocate FB group (11 July 2024):
92% of respondents were women aged between 50-70 years
84.5% were separated/ divorced or have never been married
51.3% have debts they are still paying
Survey Results
Steps Toward Financial Health
While the financial landscape for women over 50 is fraught with challenges, there are steps that women can be taken to improve their financial health and peace of mind:
Budgeting and Financial Planning: Establishing a clear budget and sticking to it can help manage expenses and savings more effectively. Consider consulting a financial advisor to create a personalized plan. If you can’t afford one, there are online aps that can help. Your bank or local charities may also be able to assist.
Emergency Fund: Building an emergency fund is crucial. Aim to save enough to cover at least three to six months of living expenses to cushion against unexpected financial shocks. Research shows that a minimum savings amount equal to 6 months worth of expenses, is what is required as an effective buffer against homelessness.
Retirement Savings: If possible, continue to contribute to retirement accounts such as 401(k)s, Superannuation, or IRAs. Explore catch-up contributions if you're over 50, which allow you to save more.
Health Care Planning: Medical expenses can be a significant financial burden. Research Medicare options and consider supplemental insurance plans to cover additional costs.
Community Resources: Utilize community resources and support networks. Many non-profits offer financial counseling, debt management assistance, and other services that can provide much-needed support.
Building Financial Confidence
While it’s clear that financial confidence is generally lower among older women, particularly those who are divorced, separated, or widowed, taking proactive steps can help bolster confidence. Becoming financially literate, learning how to budget, re-asses and negotiate regular outgoings for utilities and services, and staying informed about government benefits for older women, all helps. Seeking professional advice can empower women to take control of their financial future, and thankfully, there are many free services available that make such guidance accessible to those most in need.
In conclusion, while financial concerns are prevalent among women over 50, understanding these challenges and actively working towards solutions can pave the way for improved financial health and greater peace of mind. Taking charge of your financial situation today can help ensure a more secure and confident tomorrow.
