Seven Tips for Retirement Readiness

Women are less confident than men regarding their retirement — fitting since nearly half of women have no retirement strategy, according to a survey.

The Transamerica Center for Retirement Studies’ 13th Annual Retirement Survey revealed that although 56% of women expect to self fund their retirement through 401(k)s, retirement accounts and other savings and investments, 48% reported they do not have any retirement strategy at all.

Of the 52% who have a retirement strategy, only 11% have that strategy written down.

“There is a striking disconnect among women between how they envision their retirement and how they are preparing to realize that vision,” Catherine Collinson, president of the Transamerica Center for Retirement Studies, said in a statement. “Women face a number of unique circumstances, such as typically lower wages than men, time out of the workforce to be a parent or caregiver and a longer life expectancy, which present challenges for saving.”

According to the report, a large reason for women’s lack of retirement confidence revolves around taking care of their families. A quarter of respondents said their single greatest retirement fear is not being able to meet the financial needs of the family. Only 20% consider saving for retirement a financial priority while 55% are focused on immediate priorities like paying off credit cards or basic living expenses.

However, even of those who do have strategies, the survey revealed there was a lot that most women didn’t factor in. For instance, only 39% considered investment returns, 35% inflation and 20% tax planning. And while 52% factored in health care costs, just 24% considered long-term care insurance.

Marriage positively influences the retirement outlook of not just women, but men as well. Married couples are more proactive, usually, when it comes to saving, planning and discussing retirement.

Go to the next page to see the seven tips for women to create a retirement strategy.

Seven tips

7. Talk about retirement with family and close friends.

An open dialogue with trusted love ones about expectations of either needing to provide or receive financial support should be part of every woman's retirement strategy.

6. Have a backup plan in case you cannot work until your planned retirement.

A job loss, health issues or family obligations can force you into retirement sooner than expected. Only 20% of baby boomer women have a back-up plan for this situation. Potential cost-cutting lifestyle changes are moving to a smaller home or taking on a roommate.

5. Get educated about retirement investing.

Seek professional assistance if needed. Only 30% of women said a financial planner/broker is their go-to source for information. You should learn about ways to make your savings last longer. A professional can also help suggest the ideal time to withdraw from retirement accounts to minimize taxes and penalties.

4. If your employer offers a plan, participate and defer as much as you can.

If you decide not to maximize annual salary deferrals, you should be saving outside of work, as well. Workers who are age 50 and older can make catch-up contributions.

3. Consider retirement benefits as part of your total compensation.

If your employer doesn't offer you a plan, ask for one. A high percentage of women work part-time and therefore, do not have access to workplace retirement benefits.

2. Calculate your retirement savings needs.

Based on what you come up with, you will know how much should be saved so you can reach those retirement needs. One thing to consider is that women have longer life expectancies than men, and therefore have greater savings needs.

1. Develop a retirement strategy and write it down.

Envision your future retirement and calculate how much you will need to save each year, factoring in living expenses, health care, long-term care and benefits. What you should also consider while making this plan is the financial trade-offs if you choose to take time out of work to be a parent or caregiver.