Retirement Planning for Women:
Overcoming the Obstacles
Women generally are at a disadvantage when it comes to
saving for retirement. Let’s take a look
at some of the key obstacles.
Þ
Statistically,
women in the
Þ
On average, women
earn three-fourths as much as men while they are working. Obstacle
-less income to save from.
Þ
The typical woman
will take time out from her work career to raise children or care for elderly
parents. Obstacle - a shorter career to save from.
Þ
The average age
of widowhood, according to the Social Security Agency, is 56 years. 90% of women will be solely responsible for
their finances at some point in their lives.
Obstacle - self sufficiency is a must.
With longer to live, lower wages, shorter working
career, and often widowhood as obstacles to providing for retirement, women
should give emphasis to planning ahead for a secure retirement.
Here are some tips to providing for that secure
retirement.
ü Start savings as early as you can. The sooner you start the longer the benefits
of time work for you. Try to save at
least 10% of every paycheck. “Pay
yourself first!” as the old adage goes.
ü Be in charge of your planning. Even if you are married, have your own plan
while working together toward a common goal.
Review your plan at regular intervals.
ü Seek out professional advice. Work with a qualified advisor. Find an advisor that shares your goals and
outlook. Have them present and explain
different options.
ü Consider saving for retirement as a top priority not a
luxury. Cut back on other unnecessary
expenses if necessary.
ü Let your employer help. Many companies match a portion of your
retirement contributions. You should at
least participate in the company plan to the extent of the match.
ü Put Social Security in perspective. It is more likely than not that future
benefits will be less, not more, than current levels. Current rules say that if you are married for
10 years more, you are entitled to all of your benefits, or half of your
husband’s, whichever is greater. If he
dies, you may collect all of his.
ü Watch for bumps in the road. Often paying for college and weddings for
children become a priority or even consume retirement assets. To prevent those events from disrupting your
retirement planning progress, you should simultaneously plan for them. Ditto for life’s unexpected emergencies, save
and maintain an emergency fund so that you don’t have to rob that retirement
fund.
Despite the obstacles, with a plan and priority your
retirement accumulation opportunities can be optimized.
_______________________
Jim W.
Norman, CPA, PFS is a principal with Norman, Johnson & Co., PA, a
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