How Women Can Navigate Competing Priorities as They Age

A woman and her two young kids visit with the kids' grandmother, who is in a wheelchair.

(Image credit: Getty Images)

I’m a fiftysomething single woman who may never remarry. Given my work and intimate understanding of the trends surrounding women and wealth today, I’ve come to appreciate that I will likely navigate the emotional and financial complexities of aging on my own.

And my situation is not unique, even for those who are currently married. With longer life expectancies, the rise of gray divorce and the stark reality that 59 is the average age of widowhood, it’s estimated that 8 out of 10 women will spend their golden years without a partner.

Adding to the challenge, many of us belong to the sandwich generation, working to balance our own needs while also tending to the physical, emotional and financial demands of caring for aging loved ones, children and possibly even grandchildren. I have three sons in their 20s, while my mother and aunt are in their late 70s — I’m an only child and my aunt’s only surviving relative. In fact, nearly half of all women in their 40s and 50s find themselves in a similar situation, juggling this multifaceted responsibility.

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As a result, planning for our later decades looks very different from what our mothers and grandmothers experienced. Women’s economic power has reached unprecedented heights, with expectations that women will control more than $30 trillion by the end of this decade. Yet many of us face new pressures that will require us to balance our personal financial well-being, the needs of loved ones and our emotional fulfillment.

So how do we navigate these challenges to ensure we not only survive but thrive in our later years?

The answer: plan.

Plan for your wealth

A recent study by BlackRock suggests that 65% of women today worry they will outlive their money. Frankly, it’s one of my biggest concerns; I don’t want to become a burden to my kids. Consider this: The number of Americans aged 100 and older is projected to more than quadruple in the next three decades, with women making up an impressive 68% of that group. Planning to live to 100 is no longer just wise — it’s imperative.

The first step to financial preparedness is understanding your future lifestyle expenses. As you assess your needs, factor in the rising costs of health care and long-term care — nearly 70% of those turning 65 today will require some form of long-term care in the future. And with overall living expenses soaring, including a 10% increase in food prices and rising utility costs in recent years, women must take these factors (among others) into consideration.

Once you understand your needs, it’s important to assess how you will fund them. A good rule of thumb is that for every $40,000 of desired income, you will need about $1 million in investable assets. This is known as the 4% rule: a tool used to help determine how much you can comfortably withdraw annually from your investable assets to fund your retirement. By withdrawing no more than 4% of your portfolio value each year and allowing the rest of your investments to continue to grow, you can dramatically reduce the risk of outliving your money.

If you are worried about having enough for retirement, be proactive. Ensure you’re maximizing your 401(k) or IRA contributions today, including catch-up contributions if you're already over 50. If eligible, take full advantage of health savings accounts (HSAs), which allow you to save tax-free for future health care needs. Additionally, consider purchasing long-term care insurance to help cover potential assisted living or in-home care costs.

Then explore ways to generate additional income in the future, reducing your reliance on investable assets. This might include purchasing rental properties or starting a side business. And when appropriate, optimize your Social Security benefits — delaying your benefits beyond full retirement age (up to age 70) can increase your monthly payment by about 8% for each year you wait.

Taking these steps now can help preserve your wealth in the future.

Plan with your family

Navigating the needs of our aging loved ones and growing children can be challenging. While it’s natural to want to help, it’s crucial to ensure that your support doesn’t jeopardize your own financial well-being.

Take my situation, for instance: My eldest son is looking to get an MBA. That $60,000 to $100,000 per-year commitment could potentially translate into over $1 million of lost retirement savings over time, assuming I live into my 80s. This is money I need to confirm today that I won’t need later.

This example stresses the importance of ensuring that you can afford to support the financial needs of your loved ones without compromising your own economic security. But this requires comprehensive planning and honest conversations with your family — including siblings, and maybe even extended family members — when it comes to caregiving for aging relatives. Be open about what you can and cannot afford to do. Talking about money is not easy, nor is asking for help. Yet both are a must.

Explain the “why” behind your concerns, set boundaries and encourage others to be part of the solution. Consider creating a budget together that outlines expenses and potential contributions from each family member. Beyond financial support, work to identify the skills, resources and time that each family member can contribute. Pooling resources can help lighten your load and get everyone invested in the solutions.

These discussions with my family have been crucial. My son understands the bigger picture and the potential impact that covering his tuition might have on my long-term financial well-being. He’s exploring student loan options, higher education benefits through work, as well as scholarship opportunities, which will pay dividends to me in the future and empower him to have skin in the game.

As for my aunt, our conversation revealed that she had no estate planning in place — no power of attorney, medical directives or will. Nothing. I also expressed my concerns about her living alone in the Midwest while I’m in Texas and discussed what it would take to ensure she receives the proper care. Since then, I’ve helped her work with an attorney to create the necessary documents.

We’ve also developed a budget for potential expenses. I’ve shared what I can comfortably contribute, and she has allocated a portion of her assets to help ensure her needs are met. Now, we both have greater peace of mind about our futures.

Plan for yourself

While much of the planning for our later years often revolves around safeguarding against potential financial challenges, it’s important to recognize the unique and exciting opportunity this chapter of our life presents. A friend of mine aptly referred to this phase as “Life 2.0,” a time to prioritize ourselves after years of juggling the demands of kids, partners and work.

Now is the time to rediscover or create new hobbies that bring you joy and fulfillment in the future — activities that support your mental health and physical well-being. Whether it’s painting, writing, cycling or exploring travel groups — whatever the case may be — investing in these passions today lays the groundwork for a purposeful life as you age.

Focusing on your physical and emotional well-being, alongside your financial planning, is crucial for a fulfilling future. This proactive approach allows you to finish this chapter of your life strong and satisfied, embracing all that Life 2.0 — or even 3.0 — has to offer.

All information discussed herein is current only as of the date of publication and is subject to change at any time without notice. Forecasts may not be realized due to a multitude of factors, including but not limited to, changes in economic conditions, corporate profitability, geopolitical conditions or inflation. This material has been obtained from sources believed to be reliable, but its accuracy, completeness and interpretation cannot be guaranteed. Northern Trust and its affiliates may have positions in, and may effect transactions in, the markets, contracts and related investments described herein, which positions and transactions may be in addition to, or different from, those taken in connection with the investments described herein.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Steph L. Wagner is responsible for leading Northern Trust’s advisory practice for women and oversees its Elevating Women platform. Her personal story is one of reinvention: from private equity vice president to stay-at-home mom, to single mother fearful about her financial security, to successful businesswoman. This journey inspired Steph to devote her life to educating and empowering women to take charge of their financial lives.