Make us your home page

For women, time to start saving for retirement is now

MIAMI — Joanna Harris, who started her own business in January, remembers the day she walked out of her grandfather's luxury senior home and thought, "I want to be able to afford to live in a place like this." It's the only reason Harris kept her part-time position with a real estate firm, a job that offers a retirement savings plan.

Harris is a rarity: a mother of two, juggling work and family, who is even thinking of retirement planning in this economy. Today, most women are focused on holding jobs, caring for their families and paying bills. Less than half of working women in the United States participate in a retirement plan, according to the U.S. Department of Labor.

Women are more likely than men to care for elderly family members, start a business, work part-time jobs and step off the career track to raise children. In the struggle for work-life balance, we are losing control of our financial futures.

"Women think retirement savings is one of those things than can always wait," said Jan Knight, a financial services with MML Investors Services in Fort Lauderdale, a MassMutual subsidiary. "All it takes is to just get started, baby steps."

Sandy Hernandez, 46, a Miami health care professional raising two children on her own, sees herself working well into her 70s and maybe her 80s. "I don't see how I can ever possibly retire," she said. Yet, the recession has taught us that working into old age may be unrealistic. In this time of high unemployment, 2.1 million older Americans are looking for work.

Two important variables make it even more critical for women like Hernandez to make time for financial planning conversations: They earn less than men and live longer.

Studies show women also invest more conservatively than men, are less likely to have employer-sponsored retirement plans and are more prone to tapping retirement funds for general consumption, according to the Employment Benefit Research Institute.

They often make the mistake of focusing on day-to-day time demands and trusting their spouses to save enough for their golden years. To turn things around, women need to know exactly how much money they are spending, Knight said.

"You can't invest if you don't have a surplus," she said. "You need to figure out how to save a little, then you can talk about what's the right thing to do with that money."

The process also is easier if you have a retirement mission and a savings goal.

Jane Hardwick, a certified retirement coach, said that knowing what you want to do when you retire, where you want to live and who you will spend time with paves the way for figuring out how to get there.

Hardwick urges women to make saving for retirement a priority, even if it means less for a child's college education.

Women need to start saving sooner than men, as early as their 20s, because by the time they retire they will most likely have been in the work force 13 fewer years than men, experts say. If you're working, save as much as you can in your company's retirement plan, or in an IRA in which you can make tax-deductible contributions. Experts urge women to seek out free classes at community banks or talk with a financial planner with the goal of trying to demystify the savings process.

Eventually, most women have to invest more aggressively than men. The average individual balance for men (including all IRA types) was $91,000; for women it was $51,000. Men also contribute more to Social Security because they are less likely to take time off from their careers.

Fortunately, it's a good time to get started or add to an employee-sponsored retirement savings plan: Of the 293 U.S. employers that suspended matching contributions last year, 44 percent have restored the match or intend to restore it by next year, according to a survey by Fidelity.

Harris, the mother of two, owns CrunchCare, a South Florida nanny and caregiver referral business. She watches her 401(k) savings and makes adjustments.

Still, she understands why many working mothers forego retirement contributions: "They want to take home as much out of their paycheck as they can. They think retirement is far away."

Harris said her experience placing caregivers has shown her otherwise. " 'Later' sneaks up on people. Dealing with it later is not the right attitude."

For women, time to start saving for retirement is now 12/18/10 [Last modified: Monday, November 7, 2011 1:42pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Tribune News Service.

Join the discussion: Click to view comments, add yours

  1. Housing starts fall in July

    Real Estate

    WASHINGTON — The Commerce Department said Wednesday that housing starts fell 4.8 percent in July to a seasonally adjusted annual rate of 1.16 million. Groundbreakings for multi-family buildings such as apartments slumped 17.1 percent, while single-family house construction slipped 0.5 percent.

    On Wednesday, the Commerce Department reported on U.S. home construction in July. 
[AP file photo]
  2. Pasco doubles tourist tax to finance sports complex


    DADE CITY — Pasco County is doubling its tourist tax to 4 percent to build an indoor sports complex in Wesley Chapel and improve its outdoor boat ramps in west Pasco.

    Pasco County's plan to double its tourist tax on overnight accommodations to 4 percent is intended to help finance a $25 million sports complex in the Wiregrass Ranch area of Wesley Chapel. It  would include a 98,000-quare-foot multipurpose gymnaisium of eight basketball courts and dedicated space for gymnastics, cheerleading and a fitness center. Shown here is the four-court fieldhouse with 50,000-square-feet of space for competitions at  Disney's Wide World of Sports Complex.  Times photo by James Borchuck (2007)
  3. USAA expansion at Crosstown Center may bring Hillsborough 1,000 more jobs


    BRANDON — USAA will bring as many as 1,000 more jobs to Hillsborough County in early 2019 with the expansion of its existing operations in Brandon.

    Stuart Parker, president and chief executive officer of USAA, speaks at the company's new Crosstown Center location in Brandon during a visit following its 2015 opening. [DOUGLAS R. CLIFFORD   |   Times, 2016]
  4. FHP bids for pay raise a week after disastrous publicity


    TALLAHASSEE — This is real bad timing.

    FHP license plate.
  5. Rhetoric over: Three-nation effort to revise NAFTA begin


    WASHINGTON — Of all the trade deals he lambasted on the campaign trail as threats to American workers, President Donald Trump reserved particular scorn for one: The North American Free Trade Agreement.

    Claudio Montes checks a shipping manifest for U.S. manufactured parts heading to assembly plants in Mexico at Freight Dispatch Service Agency LTD in Pharr, Texas, in June. The freight service ships parts between the U.S. and Mexico that pass through the border freely due to the North American Free Trade Agreement. Of all the trade deals he lambasted on the campaign trail as threats to American workers, President Donald Trump reserved particular scorn for one: NAFTA. [Nathan Lambrecht | The Monitor via AP]