If you read my free eWorkbook, 21 Critical Retirement Questions Answered, you know that retirement can be more challenging for women than for men. In that eWorkbook we talked about how women often earn lower wages than men, work fewer years and tend to live longer. And nearly half of women in the United States don’t have a retirement strategy. All those factors make planning for retirement even more crucial for women. One recent news report even said many women are terrified of retirement.
On National Public Radio (NPR), Jennifer Ludden reported that retirement scares women. Many women, according to the report, lack confidence in their ability to save, to invest and to prepare for retirement. How about you?
“Women are terrified of retirement,” said Cindy Hounsell, president of the Women’s Institute for a Secure Retirement during the NPR report. “They’re terrified of running out of money. They’re terrified of becoming bag women.”
Average Income Of $38,000
Hounsell says the median annual income of full-time working women is less than $38,000. That doesn’t leave much to save and invest. But you have several good ways to lessen any fear and replace it with a feeling of greater security and comfort. Start with these three retirement planning steps:
1. Find a financial planner who speaks English, not investment-ese.
Too many retirement planners and advisors are well-trained in financial topics but poorly trained in how to talk with the average woman. They speak in jargon. Gobbledygook reigns. Women who find their retirement planner hard to understand need to find another advisor. If your advisor doesn’t ask questions more than make pronouncements, you’re with the wrong person.
2. Work with someone who’ll help with all aspects of your retirement planning—not just financials.
If you’re like most women, you want to think about more than just retirement funds. You want to consider the other key aspects of retirement. Those aspects include finding a purpose, considering where to live, taking care of other family members, and more. What good is having money to spend if you’re not excited about how you’ll spend your the time?
For women and men, retirement should be a fulfilling time of life. Find a retirement planner who has a complete view of retirement, including using your time well and being a contributor (whatever being a contributor means to you.)
3. Consider expanding your attitude about money.
Compared to 20 years ago, today’s women are more likely to be single. If you’re a married woman, you’re also much more likely than the women of the previous generation to make as much or more money than your husband. But the bad news is that you might not have educated yourself on finances. You’re earning more money, but experts like Hounsell say you’re probably not investing that money and using your household funds to make your future more secure.
Men often enjoy investing money and growing funds. Women are less likely to see money management as enjoyment. But often, if you get to know more about retirement planning and finances you get appreciate it more. The satisfaction of working with money and making wise money decisions often grows with your level of involvement.
I tend to agree with Wendy Weaver, CFP®. Wendy is a portfolio manager at FBB Capital Partners in Maryland. In the National Public Radio report, Wendy said that women in the millennial generation (roughly, that term refers to people born from 1981-96) tend to relinquish control of finances to their husbands. The thinking goes, “Oh, my husband will take care of our retirement.” Please don’t take that attitude.
Women Are Good Investors
Your retirement and your financial future are too important for you to leave them completely up to your spouse. That applies to both sexes and all generations. You may not know much about 401(k)s, stocks or bonds, but research shows that women, when they choose to invest, tend to do a better job than men.
You know us men. We often think that we have to constantly fix things, including retirement investments. We can trade investments too often, frequently motivated by a short-term gain. Women are better than men at thinking long-term. That’s the better way to think when you’re planning your retirement. Many of my women clients seem more willing to do research and ask questions than many men.
So fight any fear of retirement with self-education. Find a retirement planner who understands you. Most important, get active in your retirement planning.
If you haven’t download our free eWorkbook by clicking here. It will help you plan better for the future, and living your retirement dream.
Gene Offredi, CFP, RFC, Summit Investor Coach, Guilford, CT. Call 203.453.1017 or visit summitinvestorcoach.com.