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Subscribe to RSSWealthy women expect to be more active than their male counterparts in their retirement years, but they’re also more worried about outliving their retirement funds, according to a Bank of America Merrill Lynch study released Monday.
The study, which looks at affluent Americans’ concerns and financial priorities associated with retirement, found that most affluent baby boomers -- defined as the more than 75 million Americans born from 1946 through 1964 -- believe their retirement will be more active and prosperous than that of their parents.
Seventy percent of respondents said they expect to work, at least part time, to fund a more dynamic retirement, in which they expect to take up activities such as learning a new trade, or starting a new business. Bank of America spoke to 1,000 Americans with at least $250,000 in investable assets for the study.
Bank of America also found that affluent women expect to be more active than their male counterparts when they retire.
Eighty-six percent of women plan to travel, compared with 75 percent of men, while 64 percent of women plan to be involved in their community (only 43 percent of men said they plan to take a more active role in their communities). The study also found that 62 percent of women plan to dedicate more time to philanthropic endeavors, compared to 41 percent of men, but 24 percent of men plan to start their own business in retirement, compared with just 14 percent of women.
Women are also more concerned about the high cost of healthcare and worry their retirement funds won’t last through their lifetime, the study shows.
Seventy percent of women said they are worried about the cost of healthcare and 63 percent of women expressed concern about the longevity of their retirement assets, compared to 57 percent and 52 percent of men respectively.
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then they should give more time between thier shoping sprees or just eliminate them altogther & they should be fine
You make a very valid point, that being the root cause of many people's problems these days (and in the past decade or so since the spend shift started).
If someone is truly concerned that they will outspend their life expectancy, then maybe they should be scaling down on their trips and the like.
It always amazes me that people get what they want, and then try to figure out AFTER how to pay for it, like when it comes to cars, vacations, and gifts.
If times are tough, you scale back accordingly. And if you can't afford to pay for it with cash (house aside), maybe you shouldn't buy it. I think this also holds true for cars, but people will protest me on this one.
Money was supposed to provide us the ability to do greater things that we could do without it (keeping well within our means)...it wasn't (so far as I know) supposed to be something we had to figure out how to get because we had an insatiable lust for expensive trinkets and shiny baubles.
I have no sympathy for those who are wealthy...They should be willing to better plan for retirement
Any decent financial adviser with tell their client to spend only their interest and SS check, never spend on their principal investment, else they WILL run out of money. As long as you spend within the means where your nest egg isnt being touched, then you're fine. Maybe they just interview/surveyed some lazy women who never worked a day in their lives, and live off of their sugar daddy husbands, who will likely die of their non-stop nagging and spending.
A-N-N-U-I-T-Y
It's not that difficult, folks.
Cygnus,
I saved all I could and have lived very frugally while paying off ALL my debts. Now I fall into the category described in this story. With almost no return on my money in safe investments and, I believe, looming inflation engineered by the government, I AM worried--because I have a sense of responsibility. I made higher salaries than my husband and owned my own home when I married him. I believe that most woman are financially conservative in investments and don't want to be a burden to anyone in retirement. I also believe that you are a whining nitwit.
Sherrie, I guess you were one of the surveyed. I suggest cutting down on the $120 blue hair specials at the salon each week.
Cyg,
You just proved my point.
to all of you who think 250K in investment assets is wealthy, you've got another think coming. If you retire at 65 and only spend 25K a year you're out of money in 10 years. IF you could get a guaranteed return of 5% which is not likely in anything stable under the current economic conditions(you can do better in the stock market of course you can always lose your shirt too) you would only get 12,500 a year or roughly 1008.00 a month. Hardly lavish.
The problem is most people are completely clueless about what it takes simply to fund a comfortable retirement forget about a fabulous one. One serious medical issue and this piddling amount of money could be wiped out.
All of you commenting have the same problem the retiree's have which is you don't understand what a trivial amount of money that really is if you have nothing else coming in and no prospect of a job.
That said 250K is so far beyond the savings reach of the average working person as to be absurd.
So once again remind me about taking away social security and medicare? We'd have people starving in the streets.
Sherrie, people like Cyg are obviously jealous of your and people like you. They don't see the hard work and sacrifice it took to reach a certain level of affluence and achievement. I experience the same thing in my daily life. They feel that once you've acquired it you should give it all away, or at least feel ashamed. I applaud you. As for Cyg, you did prove your point; (s)he is a nitwit. By the way, if you should ever feel the desire to splurge on a $120 blue hair special, I say go for it. You've earned it.
Exactly. 250k is very little money to retire on. If that's all you have. You forgot Social Security though in your calculation. A lot of people retiring right now who worked their entire life have a pension. Pension + SS + 250k investment would be rather wealthy. SS + 250k investment is not.
People in their 20's to 30's right now however probably don't have pensions if they don't work for the government or a union. All they'll have (at best) is a 401k or equivalent. Then ask the same age group how much they put in said fund and it will be a pretty sad amount.
Not if they saved enough in a 401k, or similar. It would require people to cut back on luxuries (full cable package with extra sports pack, iPhone with data package, McMansion as first home, etc etc) but it can be done. It's just hard for people in their 20's and 30's to even think about saving 10% of their income into an account they won't see for another 40 years. "I'll start it next year..." then suddenly, 30 year later it hits them that they don't have anything to retire on and try to catch up ... which is absurd and impossible.
Plus the fact that social security will be bankrupt long before then dosen't help any.
That's not true at all, but with today's lack of understanding between "want" and "need" coupled with a great many people's inability to save for the future...you may be right.
I remember a couple of years into the work force a story I read on one of the money magazine-type articles that discussed a woman that worked for either home depot or lowes, and was never promoted beyond cashier. She was coming up on her retirement and had finally broken the million dollar mark.
When asked how she did it, she said that she saved, lived humbly, and didn't let her ego make financial decisions for her.
The average working person can amass more than 250k in their life, but to do so will require that they not have the newest iPhone, turn away the newest HD TV, and skimp where others can spend frivolously.
Case in point...I watch people go to lunch every single day here, and they average between 8-10 a day with tip.
Roll the numbers:
So eat left overs every day at work all your days...and you'll add up 100k there.
Another - I used to get soda out of the machine (at $1.10 a bottle)...2 a day mind you.
Now I get a 2-litre of generic for 75 cents, 2 of which last the week.
Potential savings:
A point that everyone seems to be missing is that the for-profit medical industry is very experienced and very efficient in separating the elderly from their life's savings. They frequently use fear and humiliation as tools in getting the elderly (often via their children) to pay for marginal treatments and drugs that just happen to also be very, very expensive.
Friends:
You should try to put $2 million into tax deferred accounts if you wish to live a life that does not suck. This will return enough in very safe investments, (5% return, $100,000 per year), to have a normal life and cover the differed taxes, (assuming you own your home and your children are not a financial burden....this last one is becoming more rare these days). If you can do this, then you will be able to give quite a nice chunk to the kids and grandkids, or to a charity, if that is your wish. Otherwise you will be robbing Peter to pay Paul all through your retirement and hoping you don't outlive the money.
Obviously this isn't real easy to do, so my advise is to get busy right now and get aggressive with the management of your retirement, or you will find that your fund managers have eatten all your seed corn and left your a broken future. It is almost impossible for normal middle class folks to work a job a put up this much in your accounts, so the only way to do it is to invest like a madman and work the hell out of the money before you need it. If you invest for the long term, (also known as invest and forget), it is now clear that this is unforgiveable; the long haul investment will make you poor in most mutuals; equities; bonds; C.D.'s; annuities; and money funds, I guarantee it. You should set an aggressive goal and train yourself to be diligent enough to meet it....no one who promises to help you with your investments will be around to loan you money later on when it does not produce the required results for your comfort level.
Good Luck, and get busy!
I want to know where you are getting a 5% return on conservative investments? My mom who lived frugally and saved all of her life, was getting a nice income on her CD investments until the crash. Now she lives on her $1000 a month SS so she doesn't tap into her principle. That's the problem. Investments are crap and it will be years before the conservative investments will pay more than 1 or 2 percent. So 1% of $250K = $2500, 2% = $5000. That's the annual return. So a senior woman with $250K in the bank and Social Security will be living on about $1500 a month. Now that's reassuring. What to do with all that mad money????
Don't use CDs then. They're terrible right now, my regular savings account is equal or better than a lot of them (1.3%). Perhaps look into Bonds. I was told once to take 100 minus your age during retirement and that's the percent of your assets you should put into bonds.
May or may not be good advice, but they do have higher returns while being less risk than stocks.
Shawn wrote "a woman that worked for either home depot or lowes, and was never promoted beyond cashier. She was coming up on her retirement and had finally broken the million dollar mark.
When asked how she did it, she said that she saved,"
That's a lot of skimming from the register. Talk about making change ...
If they are truly worried about outliving their funds, then they are not wealthy.
Information in headline is not given until the last two paragraphs of this story. What happened to"how to write a lede graf" to a news story!
This is the Today Show on MSNBC. This isn't a news publication.
I agree with nutgrape. I think we need to define "wealthy". Most people I consider to be wealthy are not the slightest bit concerned about outliving their retirement funds, in fact, most will not even tap their retirment funds during their lifetimes.
$250,000 of "investable" assets is by no means wealthy.
Exactly...most people of real "wealth" will have their nest egg earning them their monthly/annual stipend, so that they never even touch "principle".
That's what I consider "wealthy"...when you're money is making you enough to live, not that you are dwindling down the bank account in a race to see whose going to hit the wall first.
Well, if having $250,000 in investable assets doesnt put you as "wealthy" in america, the rest of the nation is SCREWED.
So, yeah, its a great time to eliminate all the social safety nets. Surely, if a person who has $250,000 sitting in the bank is terrified of not surviving their retirment...most of us who cant get more than $5000 in our savings account should just toss in the towel and stop trying.
Jessica, if you don't have a pension and your Social Security is $1000 a month ( about average) and your expenses are $35000 per year (rent, taxes, insurance, food, medicine, doctors, etc. ) your massive nest egg of $250,000 will last you a little more than 10 years. Half of women alive at 65 will live to age 90.
Suggest you brush up on your math skills and get a second job to save a lot more.
The answer is more saving and less spending during our entire lifetime. Keep working at least part time until you physically just can't do it. Don't take Social Security until age 70 ( the payout gets larger, the longer you wait)
Spend Less, Save More. If we (including all levels of government) had followed this rule, we would not be in the mess we are in.
If you are talking about someone that, after having worked and saved all their lives is sitting at 70 years old and has only amassed 250k...I wouldn't consider that "wealthy". I would consider that "well off" and there is a difference, the difference being that a person "well off" will drive their car to the local restaurant to eat.
The "wealthy" person will have their driver take them...or their private jet.
And I wouldn't say you need to throw in the towel, but if you're at the end of the "traditional" work life and only have 50k in savings...I wouldn't expect that you're looking to do anything but keep working and saving through the remainder of your days.
The cost of healthcare alone as you age gets extremely expensive, and unless you have a deep nestegg with which to draw from (or hopefully, which will to let earn you money), it's going to be a difficult time. If you had a 40k salary through the career to date, and are looking to the "traditional" non-working retirement, then do the math and see how long you're lasting now.
$250,000 / $40,000 (let's make it $30,000 to account for taxes) = 8.3 years.
Hence the reason people with 250k are worried...because their medical bills are high, their is no real income anymore, and their bank accounts are dropping quickly.
I've always been guided to plan to have at least 2 million (in cash, investments, and equity) by 70 years old so as to ensure the nest is deep enough to last the remaining years.
Two million will get you 60k on just a modest 3% return. If my house and cars are accounted for, that should allow me to sustain life without tapping the core...but I have way to go, in both investments and age.
Part of this relates to a person's age. At 25 $250k could be considered wealthy, but not when near retirement. Simply having a plan of systematic monthy investments in mutual funds starting as soon as a person can can easily get them to the amount needed for retirement, but people need to understand risk & reward & what is a suitable investment for different time horizons. & then stick with the plan.
And that's the key - at 40 years old now, when I entered the "real" workforce back in '94, I was told to start planning for retirement. I thought people were nuts, but started learning and planning accordingly...and it's made all the difference in the world.
We teach our kids (9 and 8) that they need to put money into savings first...
I'm not sure many people grasp the concept of having a plan...or what it entails to set a goal. I've heard people say, "have a couple million", but without having a detailed path with small milestones makes the goal completely useless.
A goal should be "S.M.A.R.T.":
If the path to retirement isn't exactly that...then you're just wandering aimlessly and will get a rude awakening one day, which I contend many do.
Actually, Poor Men have the same fear.
$250k at retirement age is NOT wealthy! Hah! Maybe $2.5M.
You can burn through $250k in 10 years EASILY! Especially if you're in assisted living and definitely if in a nursing home. Those vultures will suck you dry.
I totally agree with you that having only $250k at retirement isn't nearly enough. However...
I am proud to say that I work in a nursing home, and I object to being called a vulture. Here in MN, the state legislature controls our fee schedule, not us. Unfortunately, that also means that they control our pay structure, so there are people I work with who haven't had a raise in over 6 years. I don't hear many complaints though, because most of us are grateful to simply have a job in this economy, much less one where we're proud of what we do and who we do it for.
Depending on the level of care someone needs, it can cost anywhere from $150 to $360 a day to live in a nursing home. If you saw the number of people it takes to run a place like this and do it well, you'd realize that those prices should probably be higher...or at least the reimbursement from Medical Assistance should be better, which would encourage more facilities to accept people with such insurance.
I see every day what happens when people fail to plan for old age appropriately...both financially AND physically. If I wasn't already motivated to take care of my health, my body, AND my retirement fund, I would be just by showing up to work every day.
We are NOT vultures. We are taking care of your family and friends because you aren't able to...or in some cases, aren't willing to.
I totally agree with you that having only $250k at retirement isn't nearly enough. However...
I am proud to say that I work in a nursing home, and I object to being called a vulture. Here in MN, the state legislature controls our fee schedule, not us. Unfortunately, that also means that they control our pay structure, so there are people I work with who haven't had a raise in over 6 years. I don't hear many complaints though, because most of us are grateful to simply have a job in this economy, much less one where we're proud of what we do and who we do it for.
Depending on the level of care someone needs, it can cost anywhere from $150 to $360 a day to live in a nursing home. If you saw the number of people it takes to run a place like this and do it well, you'd realize that those prices should probably be higher...or at least the reimbursement from Medical Assistance should be better, which would encourage more facilities to accept people with such insurance.
I see every day what happens when people fail to plan for old age appropriately...both financially AND physically. If I wasn't already motivated to take care of my health, my body, AND my retirement fund, I would be just by showing up to work every day.
We are NOT vultures. We are taking care of your family and friends because you aren't able to...or in some cases, aren't willing to.
What kind of non-nonsensical article is this one?
"Wealthy women fear they'll outlive retirement money"
Normal people are freaking out that they don't have money to send their kids to colleges, can't put food at the table, 17% of the population is dependent on Food Stamp, etc. What the hell are these Wealthy Women bothered about? As one guy said, stay home. Stop going to Vegas and Atlantic City. Get rid of all the wine glasses. Drink less. Stay home and cook.
My mother in law is 99 and has been paying her way for the last 20 or so years. The nursing home is getting in excess of 8,000 per month. She has blown a fortune on the nursing home.
We all need to be afraid of running out of money.
>We all need to be afraid of running out of money.
If my mom gets to the point of needing to be in a nursing home, she'd better be afraid of me throwing a hip check her way at the top of the stairs. I guarantee she won't be outliving my her estate.
Glad I'm not your mom.
G_Reaper - How nice. You said "my her estate" so no one knows exactly what you mean. Either way, you are a selfish, ungrateful child no matter what your age might be. It would be interesting to see if you feel the same way when it is you who are getting old and might need financial assistance from you children to pay the bills until your death.
methinks "mom" already knows that and has acted accordingly (better blow it on the best nursing home you can before jr. gets his paws into it).
Ocie Nelson-
Me too. The other 5th graders will rib me to no end if my mom's name was Ocie.
ABCzyx-
When I typed that in I used the strikeout button on the toolbar to cross-out 'my', to make it appear as if I had actually called it 'my' estate and had then realized my "error" and crossed out 'my' and replaced it with 'her'.
A lot of LOLs would have ensued, with dozens of comment replies about how this crazy G_Reaper thinks that his mom's estate is actually his, and even accidentally called it "his estate" before realizing he should still refer to it as his mom's estate, to help cover his tracks.
Unfortunately, while the strikeout text showed up in the preview, when my message was posted the strikeout formatting was removed, and much confusion by the readers apparently followed.
I don't care.
the only way to not run out of money is to keep your withdrawls limited to 4% or less per years
i have 3M and worry about running out! i'm only 56. that's why i am 100% in equities. bonds lose value most every year due to inflation. the younger you are, the harder it is. it all depends on if your rate of withdrawl stays at 4% or less. if you do, you should be fine. if we have multiple meltdowns in the same decade then you could be in trouble.
betsy: excellent. Right now we actually are living on S.S. & a small with-drawl from several savings accts. Yes, it CAN be done. We get the top rate of S.S., sold (a paid-off home) just before the meltdown, built a new home with all new appliances in a much cheaper part of the country, have 2 cars paid off & no credit card or other debt.
Our $ ( far less than 3m ) is invested in a trust as secure as they can get which will start paying off the interest ( guaranteed not to go below 4%, but more if the market goes up). The only catch was that we had to wait 5 yrs. after invested to get this pay-out.
It took planning, & we aren't extravagant, but aren't eating dog food either. In fact, I need to stop now, go get dressed as we are going out to see a movie-$5 on Mondays-on a gorgeous sunny day ( before the next storm hits).
No one can plan for every contingency, but this way we minimize the risks while maximizing our retirement income.
Good Luck!
Are you nuts the cost of healthcare alone will rip apart most plans Baby Boomers will have
betsy - if you take $3M in cash and put it a shoe box when you turn 60, that gives you $100,000 per year for 30 years. Invested, it will amount to much more than that and you would never have to touch the principle. If you are worried about outliving your available income, then you need to start reassessing your priorities.
BTW, it takes a very small, insecure person to have to use a public forum to brag about her wealth.
Whatever happened to dying gracefully once you have outlived your usefulessness to society? Are these old people staying engaged with their communities? Are they sharing the wealth of their knowledge and experience? Or are they sucking up into solipsistic, self-serving escapist fantasies that somehow they "deserve" for society to keep them on life support until their very last organ fails beyond repair, despite the approaching-infinite medical costs that entails and the nearly non-existent value to society that this presents in exchange?
In some cultures, when the elders have passed their point of contribution to the community, they head out into the wilderness to confront the great unknown. That's ultimate example of "PERSONAL RESPONSIBILITY", but our culture is too infantile and greedy to follow this tradition. Instead we all seek to slip into a diminishing returns vegetative state so our family can fight over who gets what before they agree to pull the plug.
You just made me think of Zsa Zsa Gabor!
I hear what you are saying though! I don't want to be a burden to anyone nor do I want to be left to the moods of people paid to take "care" of me.
And how about the young people sponging off their parents, while they wait for a $100,000 a year job to fall into their laps?
Was Bank of America just trolling for rich women to scam?
I guess the non-wealthy have no fears, so we need to figure out a way to help these wealthy people more.. Come on people, give it up to help the wealthy..
Spaceman...I don't recall anyone in the survey being asked for your support or sympathy. You want those kind of worries, start saving.
My mother feels the same way. I told her if she was really worried then she needed to cut back on frivolous things. Either make less trips to France each year or move there permanently. I vote for the latter :)
God forbid they'd have to live on Soc. Security! Somehow I found this article obnoxious. While a good number of older people in the U.S. have to worry about making ends meet, they're worried about going abroad 2 times a year instead of 3x. They get no sympathy from me.
Its typical MSNBC disconnected-from-reality schlock. This is pretty common for them.
My motto is "72 and through". I'll have enough money to maintain my current standard of living (I am far from being wealthy but I don't need much) and I don't want to age to the point where I lose my mind and need a diaper. To me that's worse than death. So I'm cashing out at 72. No worries!
My mother has 250,000 not to invest, but to live on for the rest of her life. She finally retired at 80, and for the last 10 years, she spent every day taking care of her blind, diabetic and ungrateful husband, including spending 12 hours a day in the nursing home for the last 6 months of his life. If she wants to spend it to go to Europe or Las Vegas, I think she deserves to.
Before you condem these women, think about what kind of sacrifices they made and maybe you won't be so quick to judge.
So gold-diggers need to marry richer sugar daddies. Cry me a river.
I dont think that having $250,000 in an investment porfolio is a lot of money. I'm surprised that most people do noit have that amount. BUT I forget, there are a lot of people that would not consider never owing something other than a new car, eating out 2 or 3 times a week, or even giving up their expensive coffee instead of trying to saving money. I bring my coffee from home every day so I can save money.
Is this a joke? Perhaps if they gave up their outlandish clothes, trips, jewelry, big homes, servants, new MB's, et al, they wouldn't have a problem. I have no sympathy.....my concern goes to the many Americans who are in their late 50's and early 60's that can no longer find jobs, and are losing their homes, their life savings, and have no health benefits.
This is an egregious article....no one cares!
You'll survive. Just be worried where your heart is.
Yup, spend spend spend, fun fun fun.
Then at 64 you start to worry about retirement. GFY!
Those of us women who are not fortunate enough to be wealthy worry about outliving our 'retirement' funds, too.
Cry me a river, when I graduated from college at 21, I put myself through, I was told that S.S. would be bankrupt before I retired, so I've been saving for retirement, diligently, for 30 years. I've also made a habit of always living below my means, as a result I have a $1MM retirement account, a home that's paid for and no debt. Most of the complainers have never ever considered living below their means and now their scared. So they say "ramp up the entitlement programs" and bankrupt the young! Shameless, self centered and morally bankrupt to boot.
well, isn't it the duty of the kids to take care of their parents if they run out of cash? besides, what's the obama care all about if not taking care of our elderlies who have built this fine nation of ours?
most 20, 30, and 40 year old children are back living with their parents. Good luck with them taking care of them they are just waiting for their parents to die in hopes of a huge estate
George,
Please take care of your parents. I don't care to.
Was watching a show "home buyer" (or whatever) where a guy had been back living with mom & dad in their home for free for over three years after graduating and getting a job (yes - you heard that right...after getting a job).
So, now he was ready to find a home of his own, and because he'd been working a career and living for free (too bad his parents weren't), he was able to save over $85,000. Amazing how much you can save when you just glom off someone else.