Studies show that women often lag behind men when it comes to saving for retirement. That's especially troubling when you consider that, on average, women outlive men by three to seven years. One study, for example, found that a female retiring at age 65 can expect to live three years longer than a man retiring at the same age.

Women may accumulate less in a retirement account for a variety of reasons. For one thing, a woman's career is more likely than a man's to be interrupted to care for family members. Also, women are more often employed in part-time jobs. They may work for small businesses that don't offer retirement benefits, or in industries with low pension participation rates (such as the retail sector). When they do contribute to retirement plans, women tend to contribute less: 6% of gross income for women versus 7% for men, according to one survey. Women (again, on average) tend to invest more conservatively than men. Historically speaking, lower risk translates to lower investment returns and a smaller retirement fund.

What's a woman to do?

• Stay informed. Even if your spouse handles the family finances, discuss expected sources of retirement income, including pensions, life insurance policies, and social security. Make adjustments as needed to ensure that all expenses will be covered, even if your spouse precedes you in death.
• Save more. If still working, contribute as much as possible to your employer's retirement plan.
• Don't quit until you're vested. If you stick with a company for a specified time period (five years is common), you may be “vested,” meaning you're entitled to benefits even if you leave that particular employer. It's important to know your company's vesting policies. Sometimes women mistakenly quit a job before being fully vested in the company retirement program.
• Open a spousal IRA. Even if you're not working outside the home, open an individual retirement account in your own name. Your spouse can contribute to that account, up to $5,000 a year ($6,000 if you're over age 50).
• Review life insurance policies. Make sure you're named as the beneficiary on your spouse's life insurance policy. Also, review ownership of the policy to eliminate unexpected tax surprises.

For guidance in your retirement planning, give us a call.