(WOMENSENEWS)–Vickie Elisa vividly recalls living in her car for a week and a half after she lost her apartment 25 years ago to overwhelming credit-card debt. A friend took her in, and Elisa got back on her feet in a big way.

Elisa, 48, is now the board president of Mothers’ Voices of Georgia, a nonprofit organization in Atlanta that helps low-income women become financially empowered to better deal with health and lifestyle issues. A single mother, she owns property in Florida and South Carolina, a house in Georgia worth $350,000, and has accumulated $65,000 in retirement funds and an annuity. But she knows she is an exception.

“Half of minority women older than 65 in the United States are living in poverty,” Elisa said. “Those are my aunts, who at age 75 had to go to work at Wal-Mart because they didn’t have enough money in retirement to live in dignity.”

Elisa and her ex-husband accumulated $30,000 in debt after a year and a half of marriage. Even though he generated most of the debt he refused to pay it off. After the couple divorced, Elisa, a public health consultant, worked one full-time and two part-time jobs for five years to repay the debt and restore her credit rating.

At the time, she had no idea that she could have split the debt with her husband during the divorce proceedings.

“That was huge mistake No. 1,” she said.

Around nine years ago, Elisa attended a workshop about retirement and economic issues led by Cindy Hounsell, president of WISER, the Women’s Institute for a Secure Retirement, based in Washington, D.C. (Hounsell was named a Women’s eNews 21 Leader for the 21st Century in 2006.)

Elisa–who attended as a representative of Mothers’ Voices–said Hounsell spoke about retirement savings, money management, debt and divorce, and the impact on minority women in an eye-opening way.

Elisa met Hounsell after the workshop and soon afterward she embarked on two years of extensive training by the Women’s Institute for a Secure Retirement, or WISER, that covered the basics of money management, investment, Social Security, pension, divorce and widowhood, and reducing credit card debt. While she was working through the curriculum Elisa helped make it culturally relevant for women of color.

Groups Tackle Problem

Today, Elisa’s group is one of a handful tackling the problem of financial planning for low-income women in the Atlanta area and is joined by such national groups as Women Work! The National Network for Women’s Employment, a Washington-based nonprofit that works for women’s economic equality.

But financial planning is still rare as a stand-alone program for low-income women, said Lauri Alpern, a 20-year veteran of nonprofit leadership. “Financial literacy programs as part of other programs, such as job training or workplace development, are available.

But stand-alone programs are limited,” said Alpern, a partner in a Chicago-based startup, ROI Ventures/ROI Partners Fund, that helps social entrepreneurs go into business.

Elisa said banks and financial-planning firms have little interest in helping low-income women because they focus their marketing on those who can immediately buy a financial retirement product, such as an individual retirement account.

Elisa said that Mothers’ Voices Georgia, which won a 2006 Freddie Mac grassroots award for its economic literacy program aimed at low-income women, still has trouble persuading corporate partners that economic literacy for poor people really works.

“True, these women may not purchase some great annuity product or begin investing in five to 12 months, but believe me, they see a secure retirement as a goal that they can eventually reach with economic education, motivation and emotional support from groups like Mother’s Voices Georgia and WISER,” she said.

More Efforts Needed

Hounsell said her nonprofit organization, WISER, is the only group devoted solely to teaching women how to manage their money for a secure retirement, despite the huge push now dominating the airwaves and bookshelves to get women to close the retirement-planning gap with men that leaves women disproportionately destitute in older age.

“I’ve been doing this for 20 years,” said Hounsell. “It’s easier to work on pay equity, or a piece of this or that, but not to really look at the planning.”

Jill Miller, president and CEO of Women Work! agrees. Miller said more efforts are needed to develop financial literacy materials that low-income women can use and understand.

Twelve percent of all elderly women 65 and older live in poverty, according to the Employee Benefit Research Institute, a Washington nonprofit.

Hounsell said women continue to tell her how shocked they are to learn they are left with no benefits from a deceased spouse’s pension. In most cases, the spouse failed to choose the “survivor benefit” option on the pension forms.

“The employer doesn’t say, ‘If you pick door No. 2, there will be nothing left for your spouse after you die,” Hounsell said. “People don’t pay attention; they don’t know what they need, and they never learn the rules that affect their situations until it’s too late.”

WISER publishes a quarterly newsletter and booklets to help women better understand their situation. Women typically earn less than men; they take time out of the work force to care for children and aging parents, and they live longer than men, making them more likely to require health insurance and larger savings, experts say.

OWL Lobbies for Retirement Laws

Another group, the Older Women’s League–better known as OWL–lobbies for laws that protect women in retirement.

“Many single mothers are working two jobs. Asking them to take money out of their paychecks to put into savings is a concept that doesn’t factor into their lives,” said Laurie Young, executive director of OWL, a nonprofit based in Arlington, Va.

“We need to work on public policy to make sure that women aren’t punished in retirement because of the demands and the realities in their lives as they age,” she said.

One example would be legislation that would give Social Security credits to women in care-giving roles, Young said.

OWL sponsors a project called The Color of Money that educates women of color about preparing for a secure retirement.

The Employee Benefit Research Institute issued a March 22 report that found men age 50 and older are considerably more likely than women of the same age to receive pension and annuity income, and to receive higher yearly amounts of such income.

In 2005, 44 percent of men age 65 and older received annuity and-or pension income, with a mean amount of $16,933 a year, according to the report. Only 29 percent of women age 65 and older received annuity and-or pension income that year, with mean pension income of $10,086.

Published: 04/13/07
By Sandra Guy, WeNews correspondent

Sandra Guy, a 24-year veteran journalist, is a business reporter at the Chicago Sun-Times. She has covered business, politics, education, technology and peace issues, and served as a former president of the Chicago chapter of the Association for Women Journalists.

“Today’s winners understand that successful financial education must begin early and extends into retirement as personal needs evolve,” said Dwight Robinson, senior vice president of Community Relations and Housing Outreach. “These awards give Freddie Mac the opportunity to recognize the achievements these organizations and Congressional members have made in addressing the financial education challenges at each step.”

Champions of Financial Literacy Awards

This year the five honorees are Congresswoman Judy Biggert and Congressmen Spencer Bachus, Rubén Hinojosa, Mike Honda and Mel Watts. Their legislative efforts and personal dedication have focused on the importance of financial literacy and education, protecting consumers from abusive and predatory lending practices, and promoting financial empowerment through legislative initiatives.

Successful Models in Financial Education Awards

More than 45 organizations submitted entries in four categories, and the top programs were honored. The Women’s Institute for a Secure Retirement (WISER) and Mothers’ Voices of Georgia collaborated to bring financial and retirement education programs to minority women in rural Georgia and metropolitan Atlanta. WISER collaborated with more than 45 local organizations to offer free financial literacy education services reaching over 2,500 African American low-income women last year.

The awards selection was managed by an independent source, who also selected independent judges to review the entries, which were judged based on:

• Cost-effectiveness – strategy is modest cost compared to return on investment
• Impact – strategy increased or improved prior results
• Innovation – strategy demonstrates creativity and uniqueness
• Reproducible – strategy can be reproduced and implemented by others
• Effectiveness – overall effectiveness in delivering financial education