Mistakes to Avoid—Women in Retirement

Laurie Denker MacNaughton © 2024

It’s not often I start off with a disclaimer… but here goes:

I am a reverse mortgage specialist. This means I am a loan officer who only does reverse mortgages.

Here’s what I’m not: I am not a financial planner. I am not an attorney. I am not an insurance agent.

Consequently, my observations below are going to be simply that, namely observations. But, they are observations made over the course of many years, and ones that deeply influence the way I am laying plans for my own eventual retirement.

There are four categories of missteps I see again and again that are made by women in their 60s, mistakes which can deeply impact financial security in the retirement years.

1. Retiring at 64. This is tricky, as there often are reasons someone retires in their early 60s—illness, an unwell spouse  or parent, loss of a job. There’s no controlling for the curveballs life can throw. But, if possible, work longer. Even a couple more years  or part time work can make a big difference.
2. Taking on significant debt shortly before retirement. It’s uncommon to see someone whose retirement income is higher than their pre-retirement income was. When relying on Social Security and retirement savings, having to also service a large car payment, credit card debt, or a HELOC payment can completely throw off even carefully laid financial plans.
3. Gifting monies to family members. I know this is a touchy subject, as many women hold the belief that family takes care of family no matter what. However, a change in thinking often needs to take place. If the gifter runs low on funds and the recipients have not gained the ability to handle their own finances, everyone can go down with the ship. A related topic includes co-signing credit cards, college loans, or auto loans for family members. If one party defaults, that debt does not go away, and the aging party can find herself deeply in debt and without a fallback position.
4. Underestimating life expectancy. Needless to say, this one is very difficult, as no one comes with an “expiration date.” However, I have had scores of women tell me they never imagined they would live so long, and that they burned through their savings at too fast a clip early in retirement. Don’t assume you’re only going to live into your early 70s. According to the U.S. Census Bureau, a 65-year-old woman has a life expectancy of 20.8 years.

There is so much more I could say on this topic, but I will leave it here and simply say the following: in my role as a reverse mortgage specialist I have worked with hundreds of homeowners as they laid plans for retirement. The reason for this is because a reverse mortgage may play a significant role in improving financial survivability in retirement.

A reverse mortgage won’t be a fit for everyone, and not everyone will qualify.

But if you are—or an aging loved one in your life is— struggling financially, give me a call. Together let’s see whether a reverse mortgage might be part of the solution.