Give Mom the Gift of Financial Security

Give Mom the Gift of Financial Security This Mother’s Day

AAUW: Nearly One-Half of U.S. Adults Don’t Know Mom’s Financial Situation

WASHINGTON – While repaying mom for all she’s done in years past may be an impossible task, asking her a few simple questions right now may make a difference when it comes to her financial future. A recent American Association of University Women Educational Foundation survey of U.S. adults found that 40 percent knew very little or nothing about mom’s financial situation. In addition, the poll found that younger adults – those whose mothers have not yet reached retirement age – are less likely to know the importance of Social Security to the economic security of their mothers. According to the report, Social Security is the largest source of income for older women and is expected to remain so.

“The best gift you can give mom this Mother’s Day would be to supply her with financial information concerning her retirement,” said Catherine Hill, interim director of research at the AAUW Educational Foundation. “Women today live on average three years longer after the age of 65 than men do and, unfortunately, too many women spend their retirement years in poverty. They also tend to marry somewhat older men, which means women are more likely to be on their own when they retire.”

Whether it’s Social Security, pensions, 401(k)s, or personal savings, knowing what questions to ask mom about her personal financial situation may make a huge difference in her retirement and her life as a whole.

Useful thoughts and facts to share with mom this Mother’s day

· While the average 65-year-old woman can expect to live another 20 years, she has a 14 percent chance of living for 30 years to her 95th birthday. Savings need to comfortably stretch past “average” life expectancy.

· Over time, the value of mom’s nest egg will decrease as the cost of living rises. Even a modest inflation rate of 3 percent will make $100 today worth about $74 in 10 years; after 25 years, the value would drop by more than half to $45.

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· Social Security is the only source of retirement income that is fully protected from inflation and longevity. Mom maximizes her Social Security benefit by delaying the date that she begins receiving benefits.

· Mom can continue to work while receiving Social Security retirement benefits. Even if she begins taking benefits before the normal retirement age, she might need or want to continue working. If she begins receiving benefits before the normal retirement age, much of her earnings will be exempt from the “earnings test.” Furthermore, reductions made under the earnings test result in higher benefits later on, when she stops working altogether.

· Recent proposals to privatize Social Security have been thwarted. Further, such plans usually exempt current retirees and workers close to retirement age. Nevertheless, it makes sense for mom and you to keep your eye on Social Security in next election cycle to ensure that future generations can retire with security. Privatizing Social Security would substantially reduce benefits and significantly increase the national debt.

· Be sure to ask mom about a power of attorney should something unexpectedly happen to her. With a power of attorney, a family member will be able to act on mom’s behalf regarding financial, legal and medical matters.

To read the report, visit www.aauw.org/research/mothersdaypoll2006

Or visit www.aauw.org

Contact Ashley Carr at 202/466-9633 for more information regarding the AAUW survey or to schedule interviews.

Available interviews

Catherine Hill, AAUW Interim Director of Research, AAUW Education Foundation – For information about the report

Lisa Maatz, Director of Public Policy, American Association of University Women – For information about AAUW’s public policy position

Maria Umbach, Vice President, Prudential Financial – For information on retirement

for women

Survey methodology

Lake Research Partners added the requested questions to an omnibus phone survey of 1,015 adults ages 18 and older, including 508 men and 507 women, living in the continental United States. Interviews were conducted from March 16 to March 19, 2006.

The AAUW Educational Foundation is a leader in research on the educational and economic status of women and girls. Its research on gender equity issues raises public awareness and provides a call to action for educational institutions, policymakers, legislators, and the public. The AAUW Educational Foundation is also one of the world’s largest sources of funding exclusively for graduate women. Together with the American Association of University Women, a leading advocate for equity and education for women and girls since 1881, the Educational Foundation has adopted a multiyear programmatic focus, Education as the Gateway to Women’s Economic Security.

The Mom’s Retirement Security research project was made possible by a generous contribution from Judy Horan, AAUW Educational Foundation development vice president, in honor of her mother, Rose Steinkampf Horan.

AAUW: Because Equity Is Still an Issue

www.aauw.org