Women: Let’s Talk About Retirement

The 12th Annual Transamerican Retirement Survey published in April 2012 gives some advice and some ideas that may help both women and men who are thinking of retirement, but the advice is more timely for women.

Here are some of the ideas generated by this years survey for more go to the link in the previous paragraph:

Here are five conversation starters for women …

1. Personal decision-making style:

The majority of women (54 percent) seek advice but make their own decisions about saving and investing for retirement, but only one-third (31 percent) indicate that they use a professional financial advisor. Another 29 percent are do-it-yourselves who prefer to do their own research and make their own decisions

How do you get information about saving for retirement and what is your decision-making process?

2. Goal setting and estimating retirement savings needs:

The majority of women (60 percent) "guessed" their estimated retirement savings goal

Do you know how much money you'll need to retire at the age you want to retire?

3. The need for a strategy and written plan including a back-up plan:

Few women (7 percent) have a written plan documenting their retirement strategy and 53 percent have no plan at all; 16 percent have a back-up plan in the event that they are unable to work before their planned retirement

Do you know how you’ll reach your retirement savings goals? What would happen if you lost your job or got sick before your planned retirement age?

 4. Go-to sources for learning about saving and investing for retirement:

The majority of women rely on friends and family, closely followed by a financial planner or broker, financial websites and their retirement plan provider’s website

Who do you talk to or where do you go to learn more about saving and investing for retirement? Why?

For my American friends

5.  Awareness of opportunities like the Saver’s Credit and Catch-Up Contributions:

Few women (22 percent) are aware of the Saver’s Credit and (48 percent) are aware of the ability to make Catch-Up Contributions

Have you ever heard of the Saver’s Credit or Catch-Up Contributions? Do you know if you’re eligible?

 

How each woman ultimately plans on spending her retirement is unique, but the tools to help attain retirement readiness are common to all.

Seven tactics can help women improve their retirement readiness:

1. Calculate your retirement savings needs.
2. Develop a retirement strategy and write it down. Envision your future retirement, formulate a goal for how much you will need to save each year (be sure to include employer-sponsored retirement plans and outside savings), and be sure to factor in living expenses, healthcare needs, long-term care, and government benefits.
3. Get educated about retirement investing. Seek professional assistance if needed. Learn about Social Security and government benefits.
4. If your employer offers a plan, participate. Be sure that your annual salary deferral takes full advantage of employer matching contributions, if available. Defer as much as you can. If you decide against maximizing annual salary deferrals in the plan, be sure to save for retirement outside of work.
5. Consider retirement benefits as part of your total compensation. If your employer doesn’t offer you a plan, ask for one.
6. Take advantage of the Saver’s Credit if eligible. Make catch-up contributions if eligible.
7. Have a back-up plan in the event you are unable to work before your planned retirement.
1. And, get the conversation going by talking about retirement with family and close friends.

Policymakers also should consider the following to help employers and their employees, both women and men, to increase retirement readiness:

1. Pursue legislative and regulatory initiatives to expand retirement plan coverage for all workers including part-time workers:
2. Additional safe harbors for 401(k) and similar plans for purposes of non-discrimination testing
3. Expanding the tax credit for employers to start a plan and facilitating the opportunity of employers to participate in existing plans by implementing reforms to multiple employer plans.
4. Expanding the Saver’s Credit by raising the income eligibility requirements so that more tax filers are eligible.
5. Expanding Catch-Up Contributions by raising limits and lowering the eligible age.
6. Extending the 401(k) loan repayment period for terminated plan participants and eliminating the six- month suspension period following hardship withdrawals.
7. Requiring retirement plan statements to state participant account balances in terms of lifetime income as well as a lump sum