Memo to Women Consultants: Planning for Retirement

According to a new study by Hewitt Associates, which looked at almost 2 million employees at 72 large organizations, women are less prepared for retirement than men.

Hewitt's study not only found that women need to save more for retirement than men, but it also concluded that the gap between the amount women need to save and the amount they are actually saving is larger than the same gap for men.

The study's authors report a number of reasons why women aren't well prepared for retirement. For example, though women's incomes have jumped in recent years, their earnings are still lower than most men, and that makes saving for retirement more difficult. Women also tend to live longer than men, so they often need a bigger nest egg to secure retirement than men do.

Hewitt's advice for women is to begin investing for retirement earlier, and more vigorously. By starting a retirement fund two years earlier than planned, the resulting fund can be 18 percent larger at retirement, according to Hewitt. And by boosting the percentage of your annual income that you place in a retirement account, even by a small amount, you can make a big difference in the balance at retirement.

The report also suggests that women could choose to stay in the workforce beyond the typical retirement age. But there must be a better way than that.

The report is available at www.hewittassociates.com.

Comments

[Anne Holmes]

Interesting recommendations and observations, Mike, and thanks for the link to the Hewitt Associates report, I will download it.

I certainly agree it is best to start succession and retirement planning at least 10 years out, and based on what you are suggesting, maybe women need to start thinking about it at least 15 years out.

But who could have predicted the economic events of the past year? Certainly they have made huge changes in the retirement landscape for many – both those whose plans changed because their nest eggs are suddenly gone – and those who, like the proverbial grasshopper, just totally failed to plan. I think a lot of women fall into this category, as we are trained to be caregivers, and think ofothers before ourselves. Often to our detriment.

Perhaps you might get a group going on FaceBook., MySpace and even LinkedIn to provide a place where women consultants can congregate, share investing tips and cheer each other on.

Or maybe I should do that. I am a Baby Boomer aged woman consultant, after all. Hmmm.

Thanks again!

Anne Holmes