Save For Retirement Like A Girl

There are many good things about being a woman. Some people less existentialist than I would probably argue that one of those things that is cool about being female is that women (in the developed world) have a longer life expectancy than men. Well, it turns out that the glass-half-empty people win the day on this one, because between making less money than men, moving in and out of the workforce and the shared America predilection for not saving enough or knowing enough about your own financial affairs, women are basically going to get hosed at the end of their lives if they're not careful. Things you should be thinking about even if you're just out of college are after the jump.

According to a recent survey by Hewitt Associates, since women are likely to live longer after retirement than men do, they need to save more before that in order to fund their retirement. But, naturally we don't — the survey found women (on average) start later, invest less and move in and out of the work force, which, with the miracle of compound interest, means that women are actually more screwed than even just the late-start, less-invested, years-off information would suggest.

So, what do you do to avoid it? Start saving. It's actually pretty simple. It can start anywhere:

  • giving up your Starbucks habit and putting the money in a savings account
  • signing up for that 401K at your job and putting enough into it that you qualify for employer matching
  • moving your investments from super-safe money markets and low-yield savings accounts (the rate of inflation was 4.18% in May, so if your savings or money market yields less than that, you're actually losing value — which is really bad when you're talking about a long term investment like a retirement fund)
  • signing up for and contributing to an IRA (another capital-gains-tax-free retirement account option)
  • not ever, EVER withdrawing or closing out your retirement accounts when you switch jobs
  • using one of those stupid gimmicky "keep the change" tax plans from your bank/credit card company intended to extend the depth of your banking relationship and encourage use of your check card
  • stop buying stupid crap you don't need and put that money in an investment vehicle

Basically, the earlier you start, even if it's in small amounts, the better off you'll be in 40 years (or less). It used to be that a wife would rely on a husband's pension plan to get them through retirement and her alone after his death. If you're still counting on non-existent pension plans, a husband doing it for you or Social Security being able to meet all your needs, welcome to the 21st century in America. Here are some bootstraps.

Study: Women Not Saving Enough [CBS News]