Let’s start with some facts regarding the earnings and retirement of women.
- Women earn 77% of what men earn according to census data 
- Women tend to work more part time jobs and take time off to care for children and elderly family members.
- Women on average work 12 fewer years than men giving them less time to earn, get promotions and save for retirement. In addition women live longer than men and are more likely to run out of retirement funds. 
- Nearly eight in ten women say they lack knowledge about planning for retirement. One in three claim they hand over the responsibility of planning for retirement over to their spouse or significant other. 
For any woman the above facts need to be a cause for worry. The sooner women acknowledge this problem and act the better off they will be. What can women do about this? Here are some ways they can bridge the retirement savings gap. Since many women take time off from their careers to care for family, I have divided the tips into three time periods – while in the work force, while taking a break and when returning to the work force.
While still in the workforce
While you are still working, do your own calculations on how much you need for retirement. Don’t depend just on your spouse. Learn more about investing. Take an active role in your family finances. Know how much you are saving and where you are investing. Take advantage of the 401k match. Visit your HR person and find out how much you have to contribute to get the full company match and try to max. it out.
When you decide to take a break from the workplace
Don’t quit your career. I am not saying you shouldn’t quit your job to stay home with your kids. I am asking you to stay in touch with your field of work. Start a blog and write when you get some time. Subscribe to trade magazines. Have coffee every now and then with your ex-coworkers. Take a certification to update your skills (you can prepare for it in you own pace). During the stay at home years open a spousal IRA. Create a business on the side. Not an aggressive one, but something that will give you a break from everyday chores and also make you a little money. Channel everything you make into a retirement account. Don’t just toss the social security statements you get. Know more about how much you are eligible for and what your spousal benefits are.
When you decide to return to the workplace
Keep in mind though, that is and when you decide to return to the workplace, you may have to work longer before you retire. Don’t forget the catch up contribution for your 401k if you are over 50.
Did you take a break to take care of your family? What tips do you have for us to bridge the gap in retirement savings?
Photo Credit : Paul(dex)
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