America Saves Week Reminds Us that Women Need to Save More

http://www.americasaves.org/
If you are a working woman in your 20’s, especially if you’ve recently entered the workforce for the first time, here’s some news that may surprise you. A well-financed secure retirement is your responsibility and the planning starts today.
The truth is that older women today are almost twice as likely as men to be poor. Women live longer, but often end up with less income in retirement. If this trend is going to change then the spending and saving patterns of young women are going to have to change soon.
Here are some common myths about women and money. How many of these have been coloring your thinking?
Myth: There are more women than ever before working so we’ll be OK.
Truth: More women are now in the workforce, but women still earn less than men in almost every occupational classification. On average, women earn 73 cents for every dollar men earn. A typical 25-year-old woman with a college degree will earn about $523,000 less over her lifetime.
Myth: Poverty rates are declining so we won’t have to worry
Truth: Despite the overall decline in poverty rates among older Americans during the last several decades, many older women remain poor – a staggering 87% of the elderly poor are women.
Myth: Social Security amounts will be adjusted to meet my expenses
Truth: Ninety percent of older women receive Social Security and over half of these women would be in poverty if not for Social Security. But Social Security is designed to be a supplemental safety net—it won’t stretch to provide the extra’s that can make retirement so rewarding.
Myth: I’ll have a pension to fall back on
Truth: Because women switch jobs more often, they have a greater chance of forfeiting their pension benefits. 53% of women have no pension coverage. In addition, women are more likely to receive and spend their retirement lump-sum benefits for everyday expenses or for their children’s education leaving nothing for their own needs.
Myth: I’m Young—I have years to work and save
Truth: The average woman will lose over $650,000 in earnings, missed promotions, raises, and benefits as a result of caregiving responsibilities over their lifetime. Young working women are spending more than they earn—almost half of young women ages 21-34 had credit card debt in 2000 which limits their ability to save. 53% of single young women said they were living paycheck to paycheck.
Myth: My Husband’s/Partner’s Income Will Make up the Difference
Truth: Today, nearly 60 percent of older American women are either widowed, divorced, separated, or never married.
Almost 1 in 4 women are broke within two months of a husband passing away.
Over 75% of all women are eventually widowed at an average age of 56.
Just over one in four divorced women collect pension benefits from their former spouses. Divorced women with children are more likely to cash out their retirement to pay for family living expenses.
If you want to arrive at retirement with a comfortable financial plan here’s some good advice:
• Open a personal investment account and get financial advice on how to grow your investment.
• Join your company’s retirement plan as soon as you’re eligible and contribute as much as you can. Find out if your employer offers a pension plan and what the requirements are for participation
• Don’t count on a husband, an inheritance or any other source that you aren’t directly in control of.
• Never use your retirement savings as the family piggy bank, and
• If you go through a divorce, get some financial advice based on your new status.
Starting early is key to a financially secure retirement. Start today!