Many women find it an uphill battle to save for retirement. Across all age groups, women have considerably less income in retirement than men, according to a report from the National Institute on Retirement Security. For women age 65 and older, their income is typically 25 percent lower than that of men. As men and women age, the gap widens to 44 percent by age 80. As a result, women were 80 percent more likely than men to be impoverished at age 65 and older, while women age 75 to 79 were three times more likely to fall below the poverty level than men the same age.
We probably think most Americans are living longer these days. Many of us think our country is doing great as far as longevity goes. But research shows, not so much. A study published in the prestigious journal Lancet describes some truths we may not know about longevity in the U.S. as compared with 35 other developed countries.
Recently, a close family friend emailed me about his long-term care insurance policy, expressing his frustration over yet another premium increase. Despite the rising cost, he still feels good about his decision to have a long-term care insurance policy in place to help protect himself and his family. The discussion brought to my mind one of the most powerful and iconic scenes in children’s literature. I am referring to Willy Wonka and The Chocolate Factory (or Charlie and The Chocolate Factory).
A lot has been written about America’s retirement crisis (some of it by Next Avenue). But I don’t think there’s been enough attention given to America’s emergency fund crisis. And I think it’s about time employers step up to help with this problem by offering the equivalent of an emergency fund 401(k), maybe with some assistance from President Trump. The numbers are painfully urgent: Nearly half of U.S. households lack a basic personal safety net to prepare for emergencies and 140 million Americans have little or no savings at all, according to a recent CFED study. In a Federal Reserve survey, 46% of Americans said they’d have difficulty with an emergency expense of $400.
When it comes to long-term care, two facts stand out. First, an estimated 70% of people will need such care, which will be costly. And second, most of them refuse to buy insurance to cover it. The question is, why? Part of the explanation, no doubt, is that long-term-care insurance is expensive. Some people also may be assuming, incorrectly, that they will qualify for government assistance to help them pay for nursing-home care. Rules are in place to disqualify many who won’t meet the strict conditions required.
The most common mistake I see new investors make is assuming that the future will look like the past. To be more specific, new investors draw all sorts of faulty conclusions by assuming that the results of one particular period will look like the results of some other particular period. New investors choose mutual funds based on past performance figures, despite the evidence showing that past performance is not a good method for predicting future top performers.