Retirement for Women

Even though the last century has brought greater career opportunities for women, they still tend to make less money than men over their lifetimes. Since women tend to outlive men, they may actually need more retirement funds, and yet they tend to have fewer resources. One study actually found that the average retirement savings for women age 65 to 69 was 22 percent less than the savings of men at the same age. It’s no wonder women tend to express concern over not having enough money for retirement.

Luckily, the outlook for women is improving. Thirty years ago, women were earning about 62 cents for every dollar earned by men. Nowadays that figure hovers around 80 cents. Women are increasingly less dependent upon their husbands; about 40 percent of wives now earn more than their husbands. Still, women tend to earn less over a lifetime because they’re more likely to take time out of the workforce to raise children. While their earning potential is greater than it has been in years past, actual earnings – and therefore the ability to contribute to a retirement fund – still lags behind that of men.

So what can women do to build a better retirement fund for themselves? It’s especially important for women to contribute more toward their employee-sponsored retirement plans. Whereas men may contribute less than the maximum, especially during the early years of their careers, women should consider contributing the maximum amount. This is particularly important to consider in the years before childbearing. If women can benefit from a company matching program, they should definitely take advantage of it. For 2013, the maximum employee contribution to a 410(k) or 403(b) plan is 17,500 dollars, or 23,000 dollars for those age 50 and older.

Women are also advised to take an active role in the household’s financial decisions. Divorce or a husband’s death can leave a woman unexpectedly single in retirement, so it’s best for women to be familiar with making investment decisions. Aside from creating her own retirement account, a woman who is educated and involved with household finances will be better prepared for retirement than one who takes a passive role.
Insured Retirement Institute, 2012 March 26, 2012

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