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Women in Retirement: Are You Part of the 60 Percent?

Lisa KottlerBy Lisa Kottler, Senior Vice President, Retirement Services, NFP

Last November, at the Texas Conference for Women, we surveyed attendees about their retirement savings and found that almost a whopping 60 percent weren’t socking away enough. In fact, many weren’t even sure if they were going in the right direction. One person responded, “I don’t know if I’m on track, and that’s the worst part.”  

If you’re like the majority of those surveyed and are doubtful that you can retire comfortably, if at all, consider these results of the 17th Annual Transamerica Retirement Survey:

  • Women believe they’ll need to save $500,000 in order to feel financially secure in retirement; among those who estimated their savings needs, 56 percent said they “guessed.”
  • Most women (64 percent) don’t have a back-up plan if they’re forced into retirement sooner than expected.
  • Women’s total household retirement saving is $34,000—no change since 2012—whereas men now have $115,000, up from $50,000 in 2012.   
  • Women’s emergency savings is $2,000; men’s is $10,000.

Retirement Pitfalls

Some of these findings may have hit home for you as well. Retirement planning is a daunting task, and women have different struggles than men:  

  • Gender pay gap: Women tend to earn less, which translates to lower earnings and savings, as well as reduced Social Security benefits.
  • Cultural expectations: Women are more likely to take time out of the workforce to care for children and/or aging parents.
  • Longevity: Women have longer life expectancies, so they have greater savings needs.

But it’s not just a gender issue: many Americans, men and women alike, struggle to prepare for retirement. Why?

  1. While you may be an expert in your particular career, what do you really know about saving and investing? If your answer is “not much,” you’re not alone. It’s certainly not part of the curriculum at most schools. Simply put, you don’t know what you don’t know.
  2. We live in a culture where spending beyond your means is the norm. In fact, the average household debt, according to Nerdwallet, is staggering. Households in the U.S. have an average of $16,000 in credit card debt, $27,000 in auto loans, $48,000 in student loans and over $190,000 in mortgages. How can you get ahead if you’re saddled with debt?  

Take Your Power Back

The outlook looks gloomy, but it doesn’t have to be. You can’t fix what you don’t acknowledge, so sit down and review where you are. Learn and gain the knowledge you need to help you move forward. Consider hiring an expert—a trusted advisor could be the difference between working until you drop and retiring with dignity. Most of all, make a plan and write it down. You wouldn’t plan a cross-country road trip without a map to guide you, would you? Don’t approach your retirement without a roadmap of how to get there.

But if you do nothing else, here are the two biggest actions you can take to help you reach the retirement you deserve:   

  1. Reduce debt. Or, better yet, eliminate it. If you, too, are encumbered with debt, focus your efforts on paying it down. For guidance, follow Dave Ramsey’s “7 Baby Steps,” which can found online or in his book Total Money Makeover.
  2. Save. Once you’ve tackled your debt, contribute to a retirement plan as much as possible: preferably 10–15 percent of your pay. If you don’t have a retirement plan at work, such as a 401(k) or 403(b), contribute to an IRA or a Roth IRA.

Whatever you do, just save! You can even use your health savings account as a retirement savings vehicle, if one is available through your employer.

It’s been proven that how much you save is more important than how you invest. Said another way, the single most significant factor in your final retirement account balance is the amount you contributed, not how you invested those dollars. So start saving, or increase your savings, as soon as possible!

Happy retirement!  

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