March 21, 2016 – March is Women’s History Month, and, similar to saving for retirement, a large part of Women’s History is about independence. Being independent means being well-informed, self-reliant, and self-assured; qualities that were instrumental in women’s progress. Those same qualities are the ones you need to help you plan for retirement.
While achieving financial security might seem like vague, pie-in-the-sky type goal, we’ve got some more specific steps that you as a working woman can take to save for retirement.
1. Know the facts of your retirement plan
Knowing the details of your retirement plan is the first step in retirement planning. Whether you’ve been at your job for five months or five years, don’t be shy about finding out the answers to any questions you might have. Here’s a helpful list of questions to ask yourself from WISER’s Retirement Plan Checklist . Check out the list to find questions to ask your employer and your spouse, as well as additional questions to ask if your are contemplating divorce.
What women need to know:
- Have you earned a retirement benefit?
- Do you know how much your benefit will be?
- Do you know what happens to your benefit if you change jobs?
- Do you know what happens to your benefit if you retire early?
- Do you have retirement plan information from all of your jobs?
- Do you know how much your Social Security benefit will be?
- Do you know how you can save for retirement if you do not have a retirement plan?
2. Take advantage of your benefits
One of the best advantages to working (when it comes to retirement planning) are the benefits that come along with the job- and we’re not just talking about vacation time. A typical benefits package is worth as much as 25% of your income, and can include health, retirement, disability, life insurance, long term care and flexible spending accounts. Progressive workplaces may offer additional benefits, like paid leave, travel reimbursement or gym memberships. Again, don’t be shy about asking questions and making sure you totally understand your benefits package. Understanding and taking advantage of your benefits will lay a solid foundation for retirement. Read more tips on using your company’s benefits in the best way possible in WISER’s brochure, “20 Ways to Take Advantage of Your Company Benefits Plan.”
3. Consider and plan for the consequences of caregiving
Women are more likely to become caregivers- either to children or to seniors- than men. The task of caring for someone else is both time consuming and expensive, and falls much more frequently on women than men. That is not to suggest that you shouldn’t take time away from work to care for your loved ones. Rather, you should plan for that possibility, and think about how it will affect your finances. CBS recently reported that the average American woman will spend 17 years raising her children and 18 years caring for elderly parents. Furthermore, 80 percent of American women give birth during their lifetimes. Despite those numbers, 58 percent of women say they don’t plan to take any time of from the workforce to act as a caregiver. Those are unrealistic expectations, and acknowledging the time you may have to take off, and how it will affect your finances, is important. Time away from the job means less money is going into your retirement or savings account, and if you are working part time, you may not be receiving retirement or other benefits. WISER has plenty of resources that will help you navigate caregiving, including the Financial Steps for Caregivers Booklet.
Visit WISERwomen.org to learn more about saving, investing and retirement planning.