A Good Example

Mothers give us a lot, not the least of which is life itself. But as I was reading through all the accolades on social media over the weekend, I couldn’t help but be reminded of all my mother gave me.

As is the case in many families, “Mom” was our family’s CFO. See, like many in his generation, my dad wanted to hold the checkbook, but it was Mom who always made sure that there was money in the account. She’s the one who started setting aside money from her paycheck in her 403(b) plan at work – and continued to do so, even when my father was convinced they couldn’t afford it – and made no secret of that opinion. Or did until he got a glimpse of the statement that showed Mom’s retirement account growth – and then, inspired by that example – he began setting money aside for retirement as well.

Not surprisingly, Mom was the one who encouraged me to start saving in my workplace retirement plan as soon as I was eligible – and while I wasn’t always smart enough to take Mom’s advice in every situation, I’m happy to say that on this one I did.

Now nearly 89, Mom’s still independent, vibrant, and financially self-sufficient – and that’s no accident. A school teacher, she took a fairly significant (and unpaid) “sabbatical” so that she could stay at home with her four kids until the youngest was ready to head off to school. When she returned to work she was covered by a state pension plan, and one that required from her paycheck a much more significant contribution than most choose to defer into their 401(k) today. She even saved diligently to buy back the service credits she had forgone during the years she worked in our home without a paycheck, in addition to her 403(b) contributions (and for all the nonsense that gets the headlines about advisors in the K-12 space, the one Mom worked with for years did just fine by her).

Indeed, generally speaking, women face many more challenges regarding retirement preparation than men. They live longer (and thus are likely to have longer retirements to fund), tend to have less saved for retirement (a result of lower incomes, as well as more workforce interruptions, both when children are young, and as their parents age), and in addition to longer retirements, those longer lives mean that they are also more likely to have to fund what can be the catastrophic financial burden of long-term care expenses. Among the unexpected expenses in retirement – as parents all know, are those related to your kids – because, even after they leave home and have kids (and expenses) of their own – they’re still your kids.

Sadly, because we know how much difference it can make in retirement savings, women are less likely to work for an employer that offers a retirement plan at work – and to be part-time workers, and thus less likely to be eligible to participate in those plans even when they do have access. Oh, and like my mother, they tend to outlive their spouses – often by far more than the variance in average life expectancy tables suggest.

Yes, nearly a quarter century in, Mom’s sacrifices over the years (and they continue to this day) have allowed her to have a retirement that is, while certainly not luxurious, comfortable. Oh, like many in her generation, she’s worried about being a “burden” to her family, though – because of her preparations, there’s not much chance of that.

What she is – certainly to this grateful offspring – is a (very) good example.

- Nevin E. Adams, JD

Author’s Note: My mom’s example isn’t the only inspiration to be found around us. The upcoming Women in Retirement Conference will feature, among other things, an exciting panel comprised of the leadership of the American Retirement Association, and its member associations – all women! It’s going to be an incredible event, with lots of inspiration – and examples! 
Find out more at https://womeninretirement.org/.

Parental Guidance

Nevin and his mom.

This weekend will mark the 12th anniversary of my father’s passing. There’s sadness associated with that date, of course, but he left behind a rich legacy in friends, family, and his life’s ministry that manages in the oddest ways to touch me at least once a month, even now.

At 76, Dad lived longer than I think any of the men on his side of the family had to that point (as a lineal descendant, I’m happy to note that on my mother’s side, my grandfather and great-grandfather made it past 90). Ultimately, he was with us longer than he expected to be – but a lot less time than I ever anticipated. However, for all the good that Dad did in this life for others, as I have thought about my father this week, it’s my mother that is more often in my thoughts. Because she, like many women, have spent longer in retirement than their husbands.

As is the case in many families, “Mom” was our family’ CFO. She was the one who encouraged me to start saving in my workplace retirement plan as soon as I was eligible (and I did), and over her lifetime she has continued to practice what she preached.

Now nearly 88, Mom’s still independent, vibrant, financially self-sufficient – and that’s no accident. On top of the expenses of rearing four kids, Dad, a minister, considered self-employed for most of his working life, funded both the employer and employee portions of Social Security withholding and still found a way to set aside money in a tax-sheltered account (he also tithed “biblically,” for those who can appreciate that financial impact).

Mom, a school teacher, took a fairly significant (and unpaid) “sabbatical” so that she could stay at home with her four kids until the youngest was ready to head off to school. When she returned to work she was covered by a state pension plan, albeit one that required from her paycheck a much more significant contribution than most defer into 401(k)s). On top of that she saved diligently to buy back the service credits she had forgone during the years she worked in our home without a paycheck – and then set aside money in her 403(b) account (over Dad’s objections, I might add). Somehow, despite all those draws on their modest incomes during their working lives, they managed to accumulate a respectable nest egg – and bought a long-term care policy before such things were “cool” so as not to be a burden on their kids. Don’t tell me those of modest incomes can’t and won’t save.

Indeed, generally speaking, women face many more challenges regarding retirement preparation than men. They live longer (and thus are likely to have longer retirements to fund), tend to have less saved for retirement (lower incomes, more workforce interruptions, both when children are young, and as their parents age), and in addition to longer retirements, those longer lives mean that they are also more likely to have to fund what can be the catastrophic financial burden of long-term care expenses.

Sadly, because we all know how much difference it can make in retirement savings, women are less likely to work for an employer that offers a retirement plan at work (or to be part-time workers, and thus less likely to be eligible to participate). Only one in three women use a professional financial advisor to help manage their retirement savings and investments.

Oh, and like my mother, they tend to outlive their spouses –often by far more than the variance in average life expectancy tables suggest.

March has been designated Women’s History Month, and it seems a good time, even as it draws to a close, to acknowledge not only the special challenges that women face, but the amazing women out there – like my Mom, and perhaps yours – who are not only overcoming those challenges, but passing on the good habits of a lifetime to a new generation of savers, to boot.

- Nevin E. Adams, JD