Smart Women, Smart Money—How women nearing retirement are taking control of their financial lives.

By Amy Gage

When Kevin Foreman, a Thrivent Financial representative, meets with his clients, he tells them point blank that Americans are saving too little money for retirement. Foreman’s message is the same whether he is speaking to a man or a woman, to single people or married couples, to recent college graduates or retirees. “The money never runs out at the same time that the Lord calls us home,” he likes to say.

Although that aphorism is true for both genders and all ages, it hits hardest with middle-aged women, who statistically earn less than their male counterparts, have less experience in the workforce and, sadly, were often raised with less confidence in their ability to earn and manage money.

Despite numerous gains in society since the 1970s, women continue to earn only 80 cents for every dollar that men make, according to the Bureau of Labor Statistics. Women want to maintain their current lifestyles in retirement, but are often not confident they will be able to do so, says Vicki Seedhouse, a Thrivent Financial representative.

She sees that sense of powerlessness among her female clients in Montana. “Maybe we’re less metropolitan,” says Seedhouse, “but in general it seems that the husband is the one managing everything. Women will say, ‘My husband does it all,’ or the husband will say she has no interest whatsoever.”

Slowly, that trend is changing as greater numbers of women work outside the home. More than 70 percent of women ages 25 to 54—the prime working years—held paying jobs in 2004, according to the Bureau of Labor Statistics, and that figure is projected to increase by 2014. Nearly 30 percent of women age 55 and older hold paying jobs, the bureau reports.

Whether it’s from earning an income or a greater sense of their own empowerment, women of all ages are beginning to realize that “they have a stake in how the family’s money is managed and invested,” Seedhouse says. Many women, whether wage earners or not, manage the household finances, she explains.

“That’s equally as important as bringing the money home,” says Sherryl Adair, a Thrivent Financial representative based in Bellevue, Washington. When she works with a couple, she asks for their variable expenses as well as their fixed obligations, such as car payments and college tuition. “Asking for daily budget items allows everyone in the family to contribute their planning input,” Adair explains.

Till death do us part
Women in their 50s and 60s were brought up at a time when marriage was thought to be forever, but marriage can’t always guarantee a secure financial future. Women live an average of six years longer than men do, which leaves them financially vulnerable in old age. The average age of widowhood for women in the United States is 55 years old, and only one-third of women over age 65 are married, according to the Women’s Institute for Financial Education. And the unhappy reality is that nearly half of all first marriages end in separation or divorce within 15 years, according to the National Center for Health Statistics.

“I like to see women become educated, smart and sophisticated about finance,” says Adair. “If you’re married, it’s important to understand that if you lose your husband, whether to death or divorce, it’s beyond stressful if you don’t know the family’s financial situation.”

Heidi Albrecht, now 50, learned that lesson the hard way as a young woman. Married at 19, she had her first child two years later and didn’t complete her college education. “I started a family instead,” says Albrecht, a native of Wisconsin whose life was emblematic of many young women at the time.

Six years and two children later, the marriage ended in divorce. Scared, shaky and determined to succeed, she started on the ground floor of an underwriting company where she eventually became head of the accounting department.

Now happily remarried and living in North Bend, Washington, she recalls having undergone a “personality evolution” by necessity. “I had low self-esteem,” says Albrecht, who works as a controller for a company that builds nursing homes and assisted-living facilities for seniors. “After my divorce, I got very strong. I’m confident in what I do. I know I can earn my own living. I don’t need anybody to help me with that.”

But Albrecht did need help in managing her investments and planning for retirement. She found that help with Thrivent Financial, on the recommendation of her mom and dad. “I wanted a financial representative who could help me understand that ‘If you want to maintain this lifestyle in retirement, you need to do this.’ I wanted a path from Point A to Point B. That’s what Thrivent Financial gave me.”

Given that only 20 percent of Americans have crafted a solid retirement plan, according to a survey conducted this year by Stowers Innovations, Albrecht’s planning sets her apart. And what does “solid” mean? Thrivent Financial’s Adair laughs. “I can’t say well-diversified enough.” She also recommends consolidating your investments with one provider, to make it easier to track your portfolio and gauge your risk and potential reward.

Avoiding ‘crisis’ at midlife
Middle age brings with it a host of physical and psychological changes for women, often prompting a redefinition of the people they thought they were in their youth. Women who focused on their careers for many years may rethink the trade-offs of defining themselves more by title and income. Full-time mothers and housewives often seek interests outside the home.

When it comes to money management, this increased self-awareness helps many women see that the future is now, that shaping a rewarding retirement begins today.

Because of a physical disability, the Rev. Deana Voges knew for years that she would have to retire early. She planned accordingly by setting aside up to half of her earnings as a hospital chaplain. “I lived way below my means,” says Voges, 53, who married for the first time two-and-a-half years ago and now lives with her mother and husband in College Station, Texas. “I didn’t refuse myself anything I needed or wanted, but I said ‘no’ to a higher standard of living.”

That willingness to plan ahead, to defer gratification in a society where credit cards are easy to come by, is more common among people as they grow older, says Foreman, the Thrivent Financial professional who began working with Voges when she was in her mid-40s. “People tend to start taking retirement very seriously once their children are either in college or out of college,” he explains.

Initially, Voges educated herself about finance. She prepared her own taxes and read “every possible thing I could get my hands on.” Until she began meeting with Foreman, however, she thought that simply saving money was enough. Under his guidance, she began to make her money work for her. For his part, Foreman helps his clients begin a retirement plan by asking them a series of questions:

• What do you want to do in retirement?
• At what age do you want to retire?
• How much income will you need at that point? (Given inflation and rising health-care
costs, most people should plan to need at least 70 to 90 percent of their current income, experts say, a percentage that varies by income and tax bracket.)
• What assets do you have so far?

His female clients are especially receptive to the conversation. “Women are more open to seeking advice where they don’t feel comfortable,” Foreman says.

Live for tomorrow, today
The one constant in life is change. People get laid off. Spouses die. Grown children move back home. Unexpected tax bills defer your dreams. “We don’t control those things,” Foreman says. “But the better financial program you have, the better you can deal with the unexpected. Closing your eyes and hoping never works.”

Carolyn Dufelmeier, 59, who is single, recently retired from her teaching job in San Antonio, Texas, and is contemplating what type of work she’ll seek next. She needs to put in another four years, at least, at a job with a living wage and good benefits to qualify for the level of Medicare and Social Security that she needs.

The eldest child in her family, Dufelmeier was raised to support herself and to value work for its own sake. If asked, she would urge younger women to follow that disciplined path themselves, but she would also tell them to plan now for the inevitable.

“Start saving and investing your money earlier,” says Dufelmeier. “Think about retirement earlier. When you’re young, retirement seems so far off. You think you’ll never be old enough to retire, that it will never happen to you. But it does.”

A former newspaper columnist on issues of women and work, Amy Gage currently lives in Northfield, Minnesota.

Take Action
Ask yourself these questions to see whether you’re thinking about all aspects of your retirement.

Financial: Do you have a program? Do you stick to it and revisit it regularly to update it?  Do you have a financial professional who can help meet your goals?

Physical: Do you exercise and eat well? If not, you may pay the price in old age.

Relational: Do you make time for friends and family?

Spiritual: Where do you turn in times of turmoil? Do you pray? Have you talked to God lately?

Vocational: Do you have work, whether paid or volunteer, that helps you contribute your best to the world? Are you a lifelong learner? Are you taking classes, reading challenging books or forcing yourself to learn a new skill?

—A.G.