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60 per cent of women age 65 and older can’t scrounge enough funds to cover living expenses like shelter and food, Wider Opportunities for Women found.For a woman living alone, those costs range from about $1,600 to $2,400 per month. And for those partnered up, the costs are higher, ranging between $2,400 and $3,200/month.
What’s troubling about this is that women are at a far greater risk for this scenario than men.
The reason is clear: Elderly men simply make more money than women, raking in an average $24,300 per year compared to $14,000 per year.
To avoid the same fate, Stuart Ritter, financial planner at T. Rowe Price, offers three tips:
1. Start an emergency fund—”Making an emergency fund part of your priorities is acknowledging that good and bad things happen,” Ritter said. For more information on which account to look for, and how much you’ll need to put aside each month, read about how couples can save for emergencies.
2. Automate your savings—Your savings account should automatically deduct a portion of your paycheck or checking account balance each month so you don’t have to think twice about it. “Putting a program in place will keep you on track, even when you’re less committed to it,” said Ritter.
3. Choose the right account— An emergency account is a cash cushion for when you really need it (lose a job, wreck the car). “Like car insurance, you’re buying so if you get into a big accident you’re not taking a huge financial hit,” says Ritter. “It should be thought of as insurance, and having that trapeze so when you fall it’s there to catch you.”
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