Retirement Planning Should be a Woman’s Issue

You, as a woman, need to take an active role in planning for your retirement and not simply leave it up to your partner.  Eighty to ninety percent of women end up managing their own finances at some point in their life, either due to marrying later in life, never marrying, divorce or outliving their spouses.  And as regards outliving a spouse, the average age of widowhood in this country is 57. And by age 75, three of four married women have become widows.

Retirement is a financial challenge for women.  Let me continue to throw some statistics your way:  Older women are twice as likely as men to live in poverty.  A lot of this is due to shorter/interrupted careers, resulting in little or no retirement benefits set aside.  Amazingly, women save half as much for retirement as men and they invest too conservatively.  However, it is never too late to begin taking an active role in the personal financial planning aspects of your and/or your family’s life.

The big plus for you as a woman is that a female normally exhibits a number of traits when it comes to money that the male of the species would do well to emulate:

• Ego-less investing: There doesn’t seem to be any need for bragging rights on how well one’s portfolio performed last month.
• Willingness to ask questions:  When it comes to your money, there are no stupid questions.
• Better at research:  Women are methodical and steady in making sure of something before taking the plunge.
• Taking investing more seriously:  See items 1,2 and 3 above this one.
• Trust their instincts:  Give credit to women’s intuition, keeping in mind their propensity to follow all of the traits above.  

So the financial challenge to you is to put these traits to work to protect your financial future.

People are living longer due to healthier lifestyles and improved medical science. And the odds are that you are going to live longer than the man in your life, so you will need a bigger nest egg to see you through.  As a financial planner, I project my clients living to age 95 to assure that they will not outlive their assets. And while you may think this a bit conservative on my part, consider the consequences of living to age 90 but only having sufficient funds to last until you are 80.  So get involved in preparing for your retirement.

• Determine what you would like your retirement to be…whether it is spending a great deal of time traveling and seeing the world, or simply puttering in your garden. Before you can figure out how much you need to save, you need to know what it’s going to cost to live in retirement.
  
  
• Working might be a necessity. Four of out of five people are planning to work, if only part time, during retirement. It may be out of necessity, but for many, it may be to keep from becoming bored.  If you think you would like to do this, consider the opportunities – whether as a consultant, realtor, operating a franchise. Pick up a copy of The New Retirementality by Mitch Anthony (Dearborn Trade Publishing).
  
  
• Educate yourself on investing. The internet is a wonderful source of information.  (A good beginning resource would be the Mutual Fund Investor’s Center, which has information on retirement, college funding and the like.  www.MFEA.com). Pick up some books on personal finance. Here are a few recommendations from the Garrett Planning Network:
  
  
• You Don’t Have to be Rich: Comfort, Happiness and Financial Security on Your Own Terms, by Jean Chatzky(Portfolio/Penguin)
• Saving Money: A Smart and Easy Guide to Saving Money, by Barbara Loos (Silver Lining Books) – formerly published under the title I Haven’t Saved a Dime, Now What?
• Bogle on Mutual Funds: New Perspectives for the Intelligent Investor, by John Bogle (Dell) – a great book on mutual funds and investing.
• Retiring: An Easy, Smart Guide to an Enjoyable Retirement, by Hope Egan and Barbara Wagner (Silver Lining Books)

• If you’re working, contribute the max to your company’s retirement plan.
  
  
• If you fall within the income limits, contribute also to a Roth IRA.
  
  
• Learn to live on what you earn and always pay yourself first (save before splurge).
  
  
• Find a good fee-only financial planner. He or she can help you better understand your situation and to plan accordingly for that future.