The Boulevard to Financial Independence

By Mariette

Did you know that half of the women who are now 65 will live until they are 85? Statistically women have a longer life expectancy than men, on average they live 7 years longer – therefore they have to plan for a longer retirement. In addition they also tend to earn less money than men for doing the same job (remember ERA did NOT pass in the 1970’s.)

Here are some humbling statistics taken from WISER’s website

http://www.wiser.heinz.org/portal/index.php?option=com_frontpage&Itemid=1

Wiser’s Top Five Retirement Challenges for Women

1. Two out of three working women earn less than $30,000 per year.

2. Nine out of ten working women earn less than $50,000 per year.

3. Half of all women work in traditionally female, relatively low paid jobs without pensions.

4. Women retirees receive only half the average pension benefits that men receive.

5. Women’s earnings average $.77 for every $1 earned by men - a lifetime loss of over $300,000.

Phew, now I’m depressed.

Okay, granted a lot of those women above aren’t single and potentially have a two income household, and it could be that their husband’s have a 401k plan or IRA that their family is enrolled in. But for those of us that are single, divorced or widowed, saving for retirement can seem like a daunting task. Especially if we are a single mother trying to get by on a low income, then it’s understandable how retirement planning might not be a priority, at least not until their kids are grown.

The most important thing, as women or men, is to do what you can with regards to financial planning in general and your plan for retirement in particular. That can be paying off your debt, making sure you have health insurance (and life insurance if you have dependents,) as well as investing in a 401k or IRA. It’s all about the ratio of how much you spend versus how much you earn. Some people will be able to be more frugal with regards to this than others, depending upon what other priorities they might have. Just try to save whatever you can in a retirement fund so that you can let compound interest work it’s magic, that way there is something to fall back on when you are older. Every little bit counts, so even if you are only saving a little in the beginning, it’s that much more than you would otherwise have.

I know a lot of retirement planners, and even other bloggers, will tell you that you have to save as much as possible and start as early as possible and make it sound like the end of the world otherwise. And of course that’s the ideal scenario (not the end of the world but saving early and lots,) but the only place you can start from is where you are right now. And if where you are right now is a 50 year old woman just starting to save for retirement with children, no savings and some debt. Well then, you go from there. Sure you may not be able to retire when your 65, you may have to wait until your 70 or 75, but that’s okay. There’s no “right” way to live your life. You don’t get penalty points for not retiring by the age of 65.

If I sound like I’m trying to convince myself as well as you, I am. Sometimes the fact that I’m 40 with only $7500 in my 401K and a fair amount of debt makes it seem like saving for retirement is a daunting if not impossible task. Particularly when most retirement calculators tell me I’m way behind on my savings and need to catch up (The calculator on this site is more helpful than most because it works through what some of my options are for increasing how much I will have to retire.) I have to keep reminding myself that I’m doing what I can, and will continue to try to do more, and that’s all I can ask for. If I can’t retire until I’m 70 or 75, so be it, after all it’s not until this past century that retirement was something that people even thought about, and most of the planet now still doesn’t. So the fact that I’m even in this dilemma is pretty luxurious.

For those of you are interested in retirement planning advice specifically for women The Women’s Institute for a Secure Retirement (WISER) has some good publications posted on their website listed above. Also check out one of Matt’s post here at Boulevard R where he lists some additional resources.

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