Saving for Retirement: the Challenges Women Face

It is a simple fact of life: Women live longer than men.

So when it comes time for planning for retirement, it is important for women, especially women in public service, to begin by constructing a solid retirement plan that addresses their specific needs.

But living longer isn’t the only factor women should consider in their approach to retirement planning. For example:

• Women tend to move in and out of the workforce more often than men
• The average woman earns 76 percent of what the average man makes

At first glance the impact of these statistics may not be readily apparent. But because women move in and out of the workforce—often to raise children or care for other family members—they may have fewer opportunities to invest in employer-sponsored retirement plans. (When they do have a pension, they tend to have less money in it.)

One study comparing the income of unmarried retired women and men found that women have $8,000 less per year in retirement income than unmarried men. In addition, because the average woman earns less than the average man, she has less money available to contribute to retirement savings accounts.

That’s why it is important to not only develop a retirement savings plan now, but to create a plan that meets your individual financial requirements in retirement. To create your plan, you will want to follow three basic steps:

• Assess your current financial picture
• Develop a strategy to help you reach your goals
• Create a long-term investment program

To help you get started, ICMA-RC offers a variety of retirement planning and investing resources on its Web site at www.icmarc.org. Especially helpful on our site is the Charting Your Course series, which can help you identify some key decisions and outline steps you may need to take to develop your retirement saving and investing plan. The Charting Your Course series includes two guides: Saving for Your Retirement and Investing for Your Retirement. For more demanding financial planning requirements, you may also want to use the services of a CERTIFIED FINANCIAL PLANNER™ professional.