Baby Boomer professional women made significant progress in cracking the glass ceiling and in narrowing the salary gap with their male counterparts. Unfortunately, the same can’t be said for their preparation for their future, especially if they’re single. You see, what is even more true is that these same incredibly talented women seem to be woefully fiscally unprepared for their own retirement.
According to the Transamerica Center for Retirement Studies’ 13th Annual Retirement Survey (2012), many (41%) Baby Boomer working women plan to continue working past age 70 or not retire at all. The majority of women (53%) plan to continue working after they retire, including 8% who plan to work full time and 45% who plan to work part time. Most Baby Boomer women plan to do this because of income or health insurance-related needs.
The majority of women (56%) expect to self-fund their retirement through 401(k), 403(b) or similar accounts (42%) or other savings and investments (14%). Only 30% of women expect to rely on social security as their primary means of support during retirement.
Additionally, only 11% of Baby Boomer working women have a written retirement strategy. Another 41% say they have a strategy, but it is not written down and fully another 48% have no strategy at all.
With women in the US expected to live 8% longer (MetLife Study, 2011), on average, than men, it is imperative that Baby Boomer working women have a defined retirement strategy to help them prepare for retirement.
According to the Transamerica Center Study, here are some strategies to consider:
– Develop a retirement strategy and write it down. Envision your future retirement, formulate a goal for how much you will need to save each year (be sure to include employer-sponsored retirement plans and outside savings), and factor in living expenses, healthcare needs, long-term care, and government benefits.
– Calculate your retirement savings needs and save at a level to achieve those needs.
– Consider retirement benefits as part of your total compensation. If your employer doesn’t offer you a retirement plan, ask for one.
– If your employer offers a retirement plan, participate. Be sure that your annual salary deferral takes full advantage of employer matching contributions, if available. Contribute as much as you can. If you decide against maximizing annual salary deferrals in the plan, be sure to save for retirement outside of work. If age 50 or older, consider making Catch Up Contributions.
– Get educated about retirement investing. Seek professional assistance if needed. Learn about Social Security and Medicare. Learn about possible ways to help make savings last longer including when to take withdrawals from retirement accounts to minimize taxes and penalties. Take advantage of the Saver’s Credit, if eligible.
– Have a backup plan in the event you are unable to work before your planned retirement. Identify potential cost-cutting lifestyle changes such as moving to a smaller home or taking on a roommate(s) and consider insurance products such as disability insurance and life insurance.
– Importantly, talk about retirement with family and close friends. An open dialogue with trusted loved ones about expectations of either needing to provide or receive financial support should be part of every woman’s retirement strategy.
Baby Boomer working women (and men) are known for their incredible work ethic. They’ve spent most of their lives working toward the day when they can enjoy the next chapter, the “Golden Years”, doing all of the things they put off until “later”. Having a strategy that allows you the financial freedom to do all of those “later” dream activities is part of that great ‘Boomer attitude! It’s Your life, my friends! Live it Well!!