As financial literacy month marches forward and we continue to talk about the dollars and sense of financial literacy, particularly for women, today we turn our attention to the procrastination-inducing topic of retirement planning.
Yes, I know, you’re already thinking about reading this blog tomorrow. But don’t.
For it seems that while financial advisors are out there educating potential clients and encouraging them to sign up for retirement plans, a key group is missing out on this information, and, as a result, the savings plans that could determine their health, wealth and happiness in retirement, reports an article in today’s Women’s eNews called Money Advice Runs Low for Minority Women.
The article documents the work of the Women’s Institute for a Secure Retirement (WISER), Mother’s Voices of Georgia, The Older Women’s League (OWL) and Women Work! The National Network for Women’s Employment–a few of the organizations working on addressing the information gap regarding financial planning, investment and retirement for women, and particularly low-income minority women.
Their work is of great importance, considering that 12 percent of all elderly women 65 and older live in poverty, according to the Employee Benefit Research Institute. Futher, they revealed in a March report that men age 50 and older are considerably more likely than women of the same age to receive pension and annuity income, and to receive higher yearly amounts of such income. In 2005, 44 percent of men age 65 and older received annuity and-or pension income, with a mean amount of $16,933 a year. Only 29 percent of women age 65 and older received annuity and-or pension income that year, with a mean pension income of $10,086.
Vicki Elisa, current board chair of Mother’s Voices of Georgia–which helps low-income women become financially empowered–explains in the article that, "Half of minority women older than 65 in the United States are living in poverty. Those are my aunts, who at age 75 had to go to work at Wal-Mart because they didn’t have enough money in retirement to live in dignity."
Some of the particular barriers to retirement savings for women–and particularly low-income or minority women–according to the article, are:
- Lack of information and knowledge regarding finances, debt and retirement options related to divorce or death of a spouse.
- Banks and financial-planning firms have little interest in helping low-income women because they focus their marketing on those who can immediately buy a financial retirement product, such as an individual retirement account.
- Lack of financial literacy materials that take into account the needs and realities of low-income women.
- Women typically earn less than men, take time out of the work force to care for children and aging parents and live longer than men, making them more likely to require health insurance and larger savings–issues that are often compounded for low-income women.
- Low-income women, particularly single mothers, often cannot afford to take money from their paychecks to apply to their savings or retirement plans.
- Many nonprofits and advocacy organizations tend to focus on jobs training, pay equity or other more current issues–few are dedicated to working with women on financial planning and retirement-related education and support.
There is good news–a number of committed organizations have developed effective strategies for informing women about retirement options and the importance of planning, and are creating the tools to educate, inform and change behavior.
- WISER conducts workshops about retirement and economic issues for low-income women. Attendees learn about retirement savings, money management, debt and divorce, and the impact on minority women. WISER also conducts extensive trainings on the basics of money management, investment, Social Security, pension, divorce and widowhood, and reducing credit card debt.
- While taking the WISER training, Elisa of Mother’s Voices made the curriculum culturally relevant for women of color. Mother’s Voices’ own educational program would later go on to win a 2006 Freddie Mac grassroots award for its economic literacy program aimed at low-income women.
- WISER publishes a quarterly newsletter and booklets to help women better understand their situation.
- The Older Women’s League sponsors a a project called The Color of Money that educates women of color about preparing for a secure retirement.
Much like retirement, which requires investment today for payoff later, investing in similar programs, initiatives and practices today could yield a much more productive, brighter, dignified future for women tomorrow.
