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  • America Saves Week: Spotlight on Latina Caregivers

    February 27th, 2017

    America Saves Week (February 27 – March 4, 2017) is an annual opportunity for individuals to assess their savings and take financial action. Each year, we and other organizations across the country encourage savers – or potential savers –to set a goal, make a plan, and save automatically.

     

    America Saves Week is a time when everyone, no matter their income level, age, ethnicity, or gender can think about their savings habits. Even if you already save, the week offers an opportunity to take stock of your savings, make sure you are on track and perhaps encourage others in your life to save more.

    This year, WISER is partnering with MANA, A National Latina Organization to highlight the importance of saving, particularly among Latina caregivers. Caregivers are vulnerable to some unique challenges when it comes to saving. Oftentimes, caregiving responsibilities cause caregivers to have to leave their workplace or reduce hours, and many pay out-of-pocket for caregiving costs which can impact their own future financial security. A MetLife study showed that caregivers lost $303,880 in wages, Social Security benefits, and private pensions over their lifetime as a result of caregiving responsibilities.[i]

    For Latina caregivers, the challenges of caregiving are compounded by additional factors that make it all the more difficult, yet even more important to save.  While many Americans struggle with long-term financial security, the wealth gap is especially pronounced for Latinas – wealth of the typical white household is 10 times that of the typical Hispanic household. Latinas earn $.55 for every dollar white, non-Hispanic men earn, and median wages for Latinas in the United States are $30,293 per year, compared to median compared to median wages of $55,470 annually for white, non-Hispanic men.[ii]  Finally, Latinas live longer on average and therefore need more retirement income.

    Saving can be difficult when it feels like your income is already being stretched too thin. But it is important to remember that you can start small, with small savings goals, and build on those savings over time. You might be surprised how quickly it can add up, which can provide additional motivation to save.  This week, WISER encourages everyone to visit American Saves (www.americasaves.org) for savings tips, tools and resources.  If you don’t have access to a retirement savings account through an employer, another great way to save is through the myRA; a savings account available through the U.S. Treasury.  There is no cost to open a myRA and there are no fees.  You can contribute any amount that fits your budget, even if it is just a few dollars at a time. Learn more about this savings option at www.myra.gov.

    For more saving and retirement planning information, and resources specifically for caregivers, check out WISER’s guide, “Financial Steps for Caregivers: What You Need to Know About Protecting Your Money and Retirement.”

    [i] The MetLife Mature Market Institute, MetLife Study of Caregiving Costs to Working Caregivers, June 2011

    [ii] U.S. Census Bureau. (2015). Current Population Survey (CPS), Annual Social and Economic (ASEC) Supplement.

    Why Women Pay More For Healthcare- And What It Means For Retirement

    January 26th, 2017

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    It’s no secret that women pay more for many things—compare the prices of women’s drugstore products to men’s and the difference is obvious. But did you know women will also pay more for healthcare over their lifetimes? A recent report revealed that, on average, a 30-year-old healthy woman will pay $118,632 more for healthcare over her lifetime than a man. The report was released by HealthView Services, and it’s worth a look—it includes several projections, included expected Medicare costs depending on age, race and health conditions.

    More specifically, the report predicts that women who are currently age 30 will likely live to 91-years-old and spend $548,098 on healthcare. Comparably, men will live to 87 and spend $429,466 on healthcare. The difference is attributed to the longer life expectancies of women.  Healthcare costs are extremely high in the final years of life, explaining the more than $100,000 difference.

    So what does this all have to do with retirement? Those high healthcare costs will be levied on women during their retirement years, at a time when funds are already tight for women who, on average, have less in savings than men. The retirement gap exists primarily because women on average earn less than men during their careers and are more likely to take time off for caregiving. As a result, HealthView Services calculated that women end up with 23% less in Social Security payments than men.

    These numbers are a reminder that women need to factor in the growing cost of healthcare as they age into retirement planning. Women are also more likely to need long-term care because of their longer life expectancies. According to a report from Genworth, the cost of that can be very expensive—the average cost of a private room in a nursing home is $92,000 per year and home care costs are on average about $3,500 per month. In addition to greater life expectancies than men, women spend more twice as many years in a disabled state as men do: 2.8 years if they live past 65, 3 years if they live past 80 (American Association for Long Term Care Insurance).

    When planning for retirement, it’s extremely important to factor in the high, growing cost of health care in your final years. For more information and resources on health care and retirement planning, including long-term care, visit WISER’s page on health care.

    It’s Never Too Early to Talk to Children about Retirement

    December 22nd, 2016

    Sonya Meets Her Future SelfRetirement is a concept that most adults don’t fully comprehend, let alone kids. 401(K)s, mutual funds, compounding interest, Social Security… all of the terms and jargon surrounding retirement saving can be confusing even to the most well-educated person. One of the best ways to make sure that children grow to understand the importance of retirement saving is to start planting the seeds of knowledge at a young age. The movement to educate children about financial literacy at school is gaining traction across the country, but it is still important to talk to children about the importance of long-term savings outside of the classroom too.

    A valuable tool for introducing the concept and value of long-term saving is WISER’s publication, Sonja Meets Her Future Self. The illustrated children’s book tells the story of a young girl named Sonja who travels through time and meets herself at different points in her life. The book was published in collaboration with the Wyoming Retirement System. You can download the book here to share with the children in your life. You can also watch a narrated video of the story. After you finish, here are some lessons you can discuss together:

    1. Make Sure To Always Save Part Of What You Make

    In the story, Sonja’s grandpa takes her to the bank to open an account, and every week after that, they go to the bank together to deposit part of her allowance. This is a great reminder to kids that even if they are making a small amount of money each week, it is worthwhile to put some aside. Once they get older and their paycheck grows, their weekly savings will as well. Although many transactions are done online, the weekly act of visiting the bank the way Sonja and her grandpa did can be a much more lasting reminder to always put something aside.

    2. When You Do Buy Something, Choose Something With Lasting Value

    Following her grandpa’s advice, Sonja begins saving a little bit of money every week. But he also makes sure to let her know that “it’s OK to spend money.” When you do, it should be for something really worthwhile. In Sonja’s case, she saved enough of her allowance each week to eventually be able to buy her first skateboard. She rides the skateboard all the time, and it even allows her to travel into the future—a purchase well worthwhile! When she is 18, Sonja tells her younger self that she used the money she has been putting away each week from her part-time job to buy herself a used car—another smart, worthwhile purchase. Sonja didn’t buy things she used once and then got bored with, she bought items with real value that she made long-term use out of. Her spending options are a great lesson that spending money is not bad, as long as you are smart about it.

    3. If You Save A Little Bit Over A Long Time, Eventually You Will Have A Lot

    Sonja started saving every week at the age of 11. At first, she only saved up enough to buy a skateboard, but eventually she had enough to buy a used car, and eventually enough to live off of in retirement. Her saving story is a great lesson that even if you only save a little bit, over a long time, it will grow.

    During this gift-giving season, share the story of Sonja with a child in your life.  It is a gift that can last a lifetime!

    WISER

    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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