This is particularly alarming given that Prudential’s findings show that nearly half of women—44%—are now the primary breadwinners in their households but women are still not earning what men earn with the latest September 2014 Census figures showing women earning $0.783 for every dollar men earned in 2013.
The high percentage of women working part-time is another hindrance to financial security in retirement with the 45% of women working part-time are less likely to have workplace retirement benefits. Another study, What Women Need to Know About Retirement: A joint project of the Heinz Family Philanthropies and the Women’s Institute for a Secure Retirement points out that two-thirds of all working women earn less than $30,000 a year in jobs without pensions. Because of maternity and family leave, which average 13 years for women, retired women will receive about half the pension benefits retired men will receive. No doubt because of this, many women are deferring retirement and continuing to work in retirement. According to the Transamerica survey, 43% of women expect to work past age 70 or do not plan to retire and more than half (52%) plan to work after they retire.
So how can Adventure Women get more financially fit?
- Learn the basics of managing your money. Take an online course (Cooperative Extension, Suze Orman’s or The Women’s Institute for Financial Education) about the differences between investment vehicles (stocks, bonds, mutual funds, annuities etc.), available investment plans and programs (E-Trade, Fidelity, Prudential, TD Ameritrade, Schwab, Merrill Edge, Scottrade etc.) and planning for retirement. Identify your goals based on what you will need over the course of your employment/retirement lifecycle. Assess your tolerance for risk. Make sure you know the costs (broker commissions, account minimums, extra fees) associated with different brokerage accounts for buying and selling securities. Carefully consider the tax implications of your savings/investment strategy.
- Invest the time. Take advantage of available education, assistance and professional advice offered through local community channels, your employer, your bank and your other avenues used by women in your networks. Ask around…
- Get help. Decide if you want to use a professional partner or “do it yourself”. Choose your professional carefully based on your specific situation (requirements, 5, 10, 20 year goals, risk tolerance) and how much you want to do vs what they will do for you.
- Stay current. Change your strategy as things change. As you buy a home, pay off debt, your kids college fund is no longer an issue and your employment trajectory changes, adjust your plan accordingly. Measure your progress at least quarterly.
Go for it, girls!