Because women leave the workplace to have babies and raise them, they have developed significant gaps in retirement savings.
When professional women decide to have children, they often also cut back their hours at work or travel less. Some women change jobs entirely; taking staff positions with more flexibility to handle family raising responsibilities. A 2002 Harvard Business School survey of alumnae from the classes of 1981, 1986 and 1991 found that 62% had left the professional world.
Executive and professional women are perhaps more susceptible than most groups to ignoring their own personal financial affairs because they spend what little free time they have focusing on helping others, such as their children, family and friends, before themselves.
Women generally live longer than men: 80 years to 75 years, according to a February 2005 report by the National Center for Health Statistics. As life spans lengthen, women professionals risk outliving their savings if they do not take steps to plan for longer retirements. Women carry only half the amount of life insurance coverage that men carry and are generally underinsured, according to "Trends in Life Insurance Ownership Among Americans," by LIMRA International, 1999.
More than 70 percent of nursing home residents are women, according to the 1999 National Nursing Home Survey. Two-thirds of people receiving home healthcare are women, according to the 2000 National Home and Hospice Care Survey. Long-term care is likely to be a pressing issue for many women in retirement.
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Source: January/February 2006 issue of Consulting