in lower retirement savings. If you work and if you qualify, join a retirement plan now. Based on the data we have, approximately 47 percent of working women participated in a retirement plan. Remember, even small amounts can earn interest and add up over time. On average, a female retiring at age 65 can expect to live another 21 years, nearly 3 years longer than a man the same age. Therefore, all forms of savings can increase a woman’s chances of having enough money to last during her retirement and keep a solid lifestyle she is comfortable with. Some studies indicate that women also tend to invest more conservatively than men. Taking the right kind of risk and choosing carefully where you put your money will only enhance the strength of your retirement and the money that you have for a lifetime.
Here are some questions to help you think about retirement and take charge of your financial future:
Do you work for an employer that offers a retirement plan?
If your employer offers a retirement plan, join it as soon as you can and contribute as much as the plan allows. Most employers with a 401(k) plan match a fixed percentage of the employee’s contribution. The most common match is 50 percent of the employee’s contribution up to 6 percent of wages and salary. The majority of employers who provide matches offer 50 percent or more. Yes, that’s like getting free money! While all job categories may not be included in your employer’s plan (those of part-time or temporary workers, for instance), your job may be one that is. Remember, by saving early, you have time on your side. Your savings will grow, and your earnings will compound over time. I just told a client who is her 40’s, now that her children are “on their way”…start saving more for retirement!
Have you worked at the job long enough to earn retirement benefits?
Under some plans, such as a 401(k) or a traditional pension plan, you have to work for a certain number of years – say, 3 – before you become “vested” and can receive benefits (vesting simply means that you have worked long enough to earn the right to benefits from a savings or pension plan). Too often employees, especially women, quit work, transfer to another job, or interrupt their work lives just short of the time required to become vested. Ask the personnel office, retirement plan administrator, or union representative about the vesting period and other details of your company’s plan. Do you keep copies of the documents that define the provisions of your retirement plan? In addition to asking questions of company or retirement plan officials, you should keep copies of the summary plan description (SPD) and any amendments.