Bag Lady Fears are Real

Did you know bag lady fears are real? Do you secretly fear becoming a bag lady in retirement? If you answered yes, you are not alone. According to studies, bag lady fears are real.

Outliving their money is a woman’s biggest retirement fear.

According to the Allianz Women, Money and Power study (2012), “Forty-nine percent of all women, and fifty-six percent of single women, fear ending up broke and homeless in retirement”. This is what is known as the Bag Lady fear.

The interesting thing is that bag lady fears don’t just plague low-income women. Those considered top income earners ($200,000+) couldn’t seem to shake this fear either. That’s because bag lady fears are not based on logic. They’re based on emotions.

For women, having a plan is the best antidote to fear regarding money and retirement.

One of my favorite experts on the subject of retirement income for women is Professor David F. Babbel of Wharton School at the University of Pennsylvania. His essay, “Lifetime Income for Women: A Financial Economist’s Perspective,” cites the following statistics that justify bag lady fears.

The secret to creating enough retirement income to last your lifetime is to have a plan.

Check out my book, How Every Woman Can Retire Without Worry

As a woman, you face unique financial challenges when it comes to retirement. The fear of outliving your savings or not having enough to support the lifestyle you desire can be overwhelming.

But you can become a Money Queen who rules her financial destiny. My book will help you do that.

Why bag lady fears are real:

• Older women are 50% more likely than older men to live in poverty. (Bureau of Labor Statistics)
• The poverty rate for people above age 75 is 33% higher than that of people age 65-74. (Bureau of Labor Statistics)
• Approximately 44% of the elderly will ultimately require nursing home care. (Spillman and Lubitz, 2002)
• Roughly 75% of the residents of nursing homes are women. (Spillman and Lubitz, 2002)
• The majority of the residents in nursing homes are widowed, functionally dependent females. (Spillman and Lubitz, 2002)
• Women generally have much longer stays than men in nursing homes. (Spillman and Lubitz, 2002)

One reason for this is that women are generally younger than their husbands and provide compassionate home care for them in their declining years, delaying the time before which they need to be cared for in a nursing home. Less than 10% of women, on the other hand, have a companion by the time their health declines, and so they seek institutional care at an earlier stage of their declining health.

Ironically, in many cases, the couple’s financial reserves have already been spent on the husband’s care, leaving little for the woman.

“You can do whatever you set your mind to if you just roll up your sleeves, get in there, and do it. Everything is figureoutable.” — Marie Foleo

Also, if you don’t already have one, start looking for an advisor to work with. Interview several until you find one you feel comfortable with. Studies show that once women begin working with a financial professional to create a big picture plan for their money, their bag lady fears subside.

Get Educated on Finances

Increasing your financial literacy is the key to eliminating your bag lady fears. Knowledge and corresponding action trump fear any day of the week.

More retirement planning for women articles:

5 Most Common Retirement Planning Mistakes to Avoid

How Much Income Will You Need in Retirement?

Have You Funded Your Future Retirement Paycheck?