Hey buddy... can you spare a BMW ?

Posted by Michele Vallone on Tuesday, May 17, 2011

I read an interesting study lately that polled women over fifty about their biggest fears...and they were not what you might think. It wasn't so much about aging, or getting older. And, it wasn't about being able to find the perfect love of their lives at this stage of the game...and it wasn't about weight, or their sagging breasts or anything like that. The biggest question facing women over fifty is whether or not they would be able to support themselves into their retirement years and beyond. Some women said that it was the kind of worry that kept them up at night, or woke them from their sleep in a state of panic. How am I going to take care of myself ? How long will I have to continue to work to sustain myself ? What if I become sick and can't work ?  All very realistic questions when you think about the mortgages many women pay on their own, their health insurance, and all the other basics including cars, food, utlities, etc.  And, with many women facing job loss and the closing gap on future employment, the scenario is something to keep women up at night with fear. The monster under your bed isn't furry with big teeth and claws...the monster under your bed has become your under-funded 401k ! 

So...what can you do besides live in fear ? There actually is a pro-active approach that can create a shift in how you handle and acquire money. It may not be the answer to all your financial woes, but it can be a start with some very basic rules you will need to begin incorporating into your life...

  • Tighten your belt: stop spending and don't live above your means. ( this has been the downfall of many a good woman...and men. That BMW would look great wrapped around your as*...but can you really afford those pricey lease payments ? )
  • Stash it away: put as much money as you can into your 401(k) and other retirement plans. Max out your contribution if possible.
  • Hands off the house: stop yourself from tapping into your home equity for cash. ( How great is it to indulge yourself with that home-equity line of credit, but is that extended vacation or the jewelry really worth the cost in the long run ? )
  • Cut the cord: stop helping your adult kids. ( I know, easier said then done ) Put money into your retirement fund first, and then the college fund. ( Sounds thoughtless ?  Not at all...it's the equivilent of putting on your oxygen mask first when there is an emergency on the plane, and then helping your kids.  Taking care of yourself, is taking care of your family ).
  • Stay healthy: this generation of "after 50s" will most likely have to work many more years than we had expected, so we want to get and stay healthy. ( so often, women go to the doctor as a last resort, or don't go for regular check ups including mammographies and gynecological visits. Take care of your health so that you can expect to live a long, healthy and active life ).
  • Maintain health insurance until you're 65: having no health insurance is a much greater financial risk than almost anything else.( an uninsured visit to the ER can cost you thousands of $ out of pocket)  Stay insured (by working, if possible) until you're 65, at which time you'll switch to Medicare (which is in jeopardy as I write this, so this advice may very well change in the future. Yikes !)
The days of fully funded pensions, retiring at 55, extended retirement benefits, and continued health-care are all but a thing of the past for most women going into retirement over the next 10-15 years.

Consider consulting with a financial planner, and if you can't afford one on your own- think about getting a group of friends together with similar concerns and invite a planner to your home to do a group discussion.

Change is never easy. In fact it sucks sometimes, but the alternatives can be a lot worse.  I think the comfort in the financial future of women is that they are not alone and if they can come together, perhaps pool their resources and come up with imaginative solutions, the thought of surviving in a financially crippled economy may not be as scary as going it alone.

Would love to hear your thoughts, comments and reactions...

Michele Vallone

     

     

Comments
RJ on July 4, 2011 at 9:28:26 pm said:
Michelle, I apologize for not reading your entry until now. Your advice is priceless and speaks to all of us right where we are at the present time. You are our own Suzie Orman.
I do have one question for you. If Medicare starts in three or four months, and finances are tight, must one get a secondary insurance plan? Can one manage without it, or is the result death?

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