Women And Retirement

After paying things like the mortgage and credit card bills, many of us have little money left over to put aside for our golden years. And, even though research shows women are living longer than men, they are putting less money away for retirement:

>>Women are 50% more likely than men to avoid making investment decisions in fear of making a mistake.

>>Women save at about half the rate of men.

>>Women start saving later in life than men, which leaves fewer years to build up a retirement nest egg.

Mutual Fund Education Alliance, National Center for Women and Retirement Research

Why are women so far behind men when it comes to saving money? Not only do women generally earn less than men (according to the Census Bureau), but many also put their careers on hold or start later in order to raise a family. Sharon Rich, a financial planner who specializes in helping women, says the financial priorities of women have to change. Most experts agree, you'll need an income equal to about 70% of your pre-retirement earnings to maintain your standard of living. So, how can you catch up?

Look at Your Expenses

What are you spending your money on? If you don't have any cash to put away each pay period, consider skipping those extras in order build a nest egg.

Working Women

Almost anyone can open an IRA. And if you're a woman in the workforce, make sure to take advantage of retirement savings plans that are available to you. This may include a 401(k), profit sharing, or deferred compensation plan.

Governement Assistance

For many, Social Security is a foundation for their retirement plans. But, how much money can you count on? Well…that depends:

Working in the workforce

If you're a woman in the workforce, you're earning credits towards Social Security benefits. The number of credits you need to be entitled to retirement benefits depends on your date of birth. If you were born in 1929 or later, you need 40 credits. That's 10 years of work. If were born before 1929, you need fewer credits. If you were born in 1928, you need 39 credits to be eligible. 38 credits are required for people born in 1927, and so on.

>>If you've collected enough credits, you can retire as early as age 62. However, your monthly checks will be lower. This takes into account that you'll be getting payments for a longer time because you retired earlier.

>>If you wait until 65 to retire, you'll be eligible for full retirement benefits. If you retire after age 65, your monthly payments will be higher because you’ll begin collecting later.

>>If you reach 70 and have not retired yet, your benefit increase no longer applies.

Are you divorced?

In the case of divorce, a person may be entitled to collect Social Security benefits based on his or her ex-spouse's record of accumulated points. To qualify for an ex-spouse's record, a person must:

>>Have been married to you for at least 10 years.

>>Be at least 62 years old.

>>Be single.

>>Not be eligible for an equal or higher benefit on his or her own Social Security record.

The amount of benefits an ex-spouse receives has no effect on how much he/she or any current spouse may receive.

Survivor benefits for spouse

If you're husband or wife has passed away, you're eligible to collect his or her benefits. You can start collecting full benefits at the age of 65 however, you may also collect reduced benefits as early as age 60.

If you're planning on collecting survivor's benefits, you should contact the Social Security Administration as soon as possible. You can apply by telephone or at any Social Security Office.

If your spouse was already collecting benefits before he or she passed away, you should also contact the Social Security Administration.

BRIGHT IDEA…

Are you setting enough money aside for retirement? Use this retirement planner to figure out how much money you'll need save in order to reach your retirement goals.

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