A survey conducted by the Transamerica Center for Retirement Studies found women tend to lag behind men in terms of saving and planning for retirement.
The organization’s president, Catherine Collinson, called this “concerning” and offered eight suggestions for how women can take charge of their retirement plans.
1. Save on a regular and consistent basis. This is critical because 46% of surveyed women expect to use retirement account savings or other savings and investments to fund retirement.
2. Consider retirement benefits as part of total compensation. Fewer women than men participate in a workplace plan, though this is partially due to higher levels of part-time employment among women.
3. If offered a retirement plan by your employer, participate. While 82% of men participate in their employer’s 401(k) plan when offered, just 76% of women do. Not taking advantage of matching contributions leaves money on the table.
4. Develop a retirement strategy. Base it on an envisioned retirement, estimate expenses and write the strategy down. Even though 52% say they will need at least $1 million, close to two-thirds of women (62%) say they only guessed at how much they will need for retirement.
5. Carefully consider the financial trade-offs and options before leaving the workforce to parent. Shifting to part-time work may help mitigate the long-term financial impact.
6. Get involved with family finances. Have an open dialogue regarding expectations about needing to provide or receive financial support with family members. Also, discuss expectations about when retirement will occur (56% of women expect to either work beyond age 65 or not retire at all.)
7. Educate yourself about retirement investing. More than half of women (52%) want education materials or a starting point that is easy to understand.
8. Have a financial backup plan. Unforeseen events such as divorce, a spouse’s death or health issues can interfere with saving for retirement. Emergency savings, insurance plans and budgeting skills can help to offset this risk.
Source: “Sixteen Facts about Women’s Retirement Outlook,” Catherine Collinson, Transamerica Center for Retirement Studies, March 2016.