The average American woman now lives to age 79, some seven years longer than the average male. This means a moderately aggressive strategy is important, even after retirement, to compensate for inflation, taxes on retirement income, and medical costs. Unfortunately, women tend to pick investments that offer guaranteed returns over stocks, or stock mutual funds, whereas men are twice as likely to invest in stocks. Given the historically higher returns of equities versus bonds, the longer a woman lives, the more she could be penalized for being too conservative. A second problem is that women of all ages are less likely to have a pension or retirement savings plan.
Women generally earn less than men and are more likely to work part-time or change jobs.
This interruption in earning power can halve her retirement benefits. In too many instances, a woman is not even aware of her vulnerability to her family member's financial strategies. Death, divorce, job loss, illness or some other unforeseen event can change a woman's situation overnight. Unfortunately, abdicating responsibility and not being involved in investment and money-related decisions can be a prelude to disaster should one of these events occur. Additionally, too many women have a poor understanding of their parents' wishes, with the result being probate problems.