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S.T.E.P.S. - Smart, Tailored, Event-Driven, Packaged Solutions
provided by Women's Financial Network at Siebert
Retirement for Women, Part
I -- Introduction
Nest egg, golden years, golden parachute even- you've undoubtedly heard all the buzzwords by now. But have you started to seriously consider your own retirement? If you're anything like the majority of Americans – women especially – then the answer is simply, "no".
Why aren't women more interested in planning for their retirement?
- "I'm only 30 years old! Retirement isn't even on my horizon yet."
- "It's too late for me to start thinking about retirement. I should've started a long time ago."
- "My husband is in charge of our retirement plans."
- "I have plenty of money – I'm really not worried about cash flow in my later years."
- "I'm just trying to make ends meet. I can't afford to set anything aside for a rainy day, let alone the distant future."
Any of these sound familiar? The so-called "distant future" may not be so far off after all, and retirement might be just around the bend. The time to start planning is now, as the steps you take today can help determine the size of your nest egg, and shape the course of your retirement later on.
Your retirement will most likely be the largest expense you'll ever be responsible for funding – you simply can't afford to wait. Here are some examples:
As someone in her twenties, waiting one year to save $10 a week could cost you more than $12,000 in retirement.
As someone in her forties, waiting one year to save $50 a week could cost you more than $18,000 in retirement.
Women and Men Have Different Needs
Women have special needs that require that they plan earlier and even more earnestly than men do. Need a few cold hard facts? The proof is in the pudding. Consider the following:
- Women are known to be savers. We tend to save everything but the kitchen sink, yet when it comes to retirement only 32% of women set aside funds. On the other hand, 41% of men are busy setting themselves up for smooth sailing in their later lives.
- Women earn less than men do – still. Period. For every dollar in a man's paycheck, a woman receive 76 cents, and as a result, women are entitled to lower pension benefits and smaller Social Security checks. In 1993, the average Social Security benefit paid to women was $571.20 a month – that's 25% lower than the average benefit men took home.
- Women change jobs and careers – a lot. The average woman over 25 years-of-age switches jobs every 4.8 years. Because most employer-sponsored retirement plans vest only after 5 years, this means that many women are forced to forego retirement packages from their previous employers when they switch.
- Women live longer – on average women live a good 7 years longer than men do. What's more, 50% of married women over the age of 65 outlive their husbands by a staggering 15 years, and not all of them are entitled to their husbands' retirement packages – it all depends on individual state laws.
For more statistics on how women and men are different, click here.
The Bottom Line
The message is clear – regardless of your age or tax bracket -- start saving now, start saving smart, and your retirement package will take care of you when you need it most. Let's get started.
Continue to: Part II: Government Subsidized Retirement Contributions
Learn about all the S.T.E.P.S.
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Network at Siebert, where Smart Women Invest.
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