But the reality is that women often live longer than men, and
therefore will have to figure out how to stretch retirement dollars
longer, says Elaine Sarsynski, executive vice president of
MassMutual's Retirement Services Division and chairman and CEO of
MassMutual International LLC.
Only 39 percent of women report being confident they know how to
calculate how much money they will need in retirement, according to
the nationwide survey. And compared to men, women were less likely
to increase portions of income saved through work retirement plans,
or contribute to a regular IRA account.
"Women need to pay attention to personal finances, because one
way or another there is some likelihood they will be doing it
alone," says MassMutual Financial Professional Robin Weingast. "More
than 50 percent of women age 75 or older live alone, and the median
income of women 65 plus is now $15,000, according to the U.S.
Department of Health and Human Services 2011 report on older
Americans."
Sarsynski says it is also troubling to note that when people
retire early, they are often doing so for negative reasons like
declining health, disability issues or unemployment. A 2012
Retirement Confidence Survey by the Employee Benefit Research
Institute and Mathew Greenwald & Associates found that to be the
case for 50 percent of their respondents.
"If you are a woman in this situation, you may be even less
prepared to handle such a sudden challenge," Sarsynski says.
For women in all stages of life, here are some financial aspects
that should be reviewed and added to a retirement planning program:
-
Bank accounts --
If you're married, sharing joint bank accounts can help
highlight how the family income is spent. Chances are you and
your spouse don't earn exactly the same income. Some couples
decide to split expenses evenly, while others appropriate the
larger income toward the larger bill payments. Whatever you
choose to do, consider creating a personal savings account in
addition to the household financial contribution
responsibilities you already have.
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Debt -- Debt
accumulation can cause a strain on a spouse's credit -- and
finances -- even if it happened prior to the wedding. Determine
if you will be held responsible for your spouse's prior debts,
and if so, to what extent? If you are able to keep your prior
debts separate, it will help to ensure each other's property
remains out of reach of creditors, protecting your individual
credit ratings.
-
Retirement -- On
average, women tend to spend 12 years out of the workforce due
to caregiving responsibilities for children, parents and
spouses, according to the U.S. Department of Labor. To top it
off, women typically earn 77 percent of what their male
counterparts earn. This traditionally results in women
contributing less to retirement via 401(k) accounts, or
receiving less through pensions and Social Security benefits.
Because of these factors, women need to start a retirement
planning process earlier in life, either setting additional
money aside, or meeting with a financial adviser to discuss
options.
-
Insurance -- Even
with a great retirement plan in place, unplanned factors can
impact savings. Disability income insurance can provide a source
of income in the event you are unable to work because of an
accident or illness. And life insurance can help provide
financial security upon death by providing funds for children to
attend college, or to help continue with mortgage payments.
-
Maintenance --
Make sure to keep retirement savings and insurance on pace with
income. It's important to keep your retirement savings on par
with what you earn. If you receive a raise, consider using a
portion of that money to increase your contribution to your
401(k) plan. The same goes for disability income insurance
protection. As your income rises, so should how you allocate
funds to protect it.
Taking a good look at personal long-term plans can help women be
better situated for their futures financially. Retirement is an
option for all women no matter their life situations, and can become
a reality with good planning.
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