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."