Women face more obstacles to a secure retirement than men, for a combination of reasons having to do with longevity, lower earnings and often lack in savings and financial experience. Too many end up scrambling to make ends meet in their senior years.
"Women are just not taking hold of their financial futures," says Cindy Hounsell, president of the Women's Institute for a Secure Retirement. "That's really what needs to happen."
Here are some basic ways to help them head off those difficulties before it's too late:
1. SAVE MORE. Saving early and often is easier said than done in a tight economy. But knowing the long-term consequences of not saving can be a powerful motivator. That can mean using an online retirement calculator to gauge future needs, consulting with a financial adviser or just thinking more about what their individual circumstances will be in the long run, spouse or partner aside. Saving some money outside a retirement plan also is a good idea.
2. CONTRIBUTE TO A SEPARATE IRA. It's important that women save in their own IRAs or other retirement accounts, says Jean Setzfand, director of financial security for AARP. Relying solely on a husband's 401(k) isn't wise, even if the woman is the major beneficiary. It won't be enough in most cases, and it may be depleted as he ages and uses it for medical costs.
3. INVEST MORE AGGRESSIVELY. Women generally prefer less risky investments than men. This can be good because women don't react as much to market movements. But women have a tendency not to invest enough in the stock market, according to Eleanor Blayney, president of the Directions for Women financial advisory service in McLean, Va. Investing in stocks provides the best odds for a portfolio to grow over the long haul. Relying too heavily on certificates of deposit or bonds can leave portfolios vulnerable to being eroded by inflation.
4. BUILD A SUPPORT SYSTEM. Women should plan ahead for living alone in retirement by thinking about how they can use community resources and social networks to build a support system, says Blayney.
5. PLAN FOR THE WOMAN ALONE. Whether single or part of a couple, focusing on what a woman's benefits and income would be if she ends up widowed, or otherwise alone in retirement, needs to be part of the decision-making. It's in every woman's self-interest.
6. LOOK FOR GOOD ADVICE. Many women don't seek the help of a financial adviser, perhaps because they don't think they can afford it. But relying on family and friends for "expert" advice can cost a lot more in the long run.
7. CONSIDER LONG-TERM CARE. Many women can't afford long-term care insurance, but those who can should consider getting a policy in their 50s or early 60s. Figure out which coverage would be the best fit by checking sites such as that of the National Clearinghouse for Long-Term Care Information, www.longtermcare.gov .
Source: The Associated Press.