www.privateairny.com Private Air | Winter 2019/2020
47
FINANCE
By: Ken Nuss
Challenges Abound, but Women
Can Create Their Own Pensions
SECURING
RETIREMENT
FOR WOMEN
Y
ou may see her at the
cash register of the
local supermarket or
drugstore. She's in her
60s, 70s, or 80s and can't afford
to retire. Her savings and Social
Security benefits don't pay the
bills.
It's a common problem. Women,
on average, earn less than men,
and that translates into lower
savings and smaller Social
Security checks. e National
Institute on Retirement Security
found that the average income
of women 65 and older was 25%
lower than that of men.
Women live longer, so their
savings have to last longer. And
fewer employers today offer
traditional lifetime pensions.
Women, in particular, need to
build up assets so they can create
their pensions.
Women tend to be more risk-
averse than male investors. But
the safest investments, such
as Treasuries and certificates
of deposit, are both low-yield
and taxable unless held in a
retirement account.
Another low-risk savings
vehicle, the fixed annuity, is
often overlooked by women.
at's unfortunate because fixed
annuities can build faster wealth
than other safe bets.
Fixed-rate annuities behave
much like CDs, offering a set
interest rate for a set number of
years. ey are guaranteed by the
issuing insurance company and
are further backstopped by state
guaranty associations. e level of
protection varies by state.
Two key advantages help women
build savings faster: tax deferral
and generally higher rates
than CDs or Treasuries with a
comparable term. Without taxes,
savings can grow faster.
Fixed annuities are a valuable
supplement to IRAs and 401(k)s.
