Saving for retirement is for women, too

McClatchy Newspapers (MCT) - More women than men outlive their savings, partly because they tend to live longer. But women's work histories also set the stage for financially pinched retirement years.

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As a group, U.S. women work fewer years than men, and they're more likely to work in part-time or lower-paying jobs. Many women, therefore, build up fewer Social Security credits for retirement benefits.

And, because women are more likely to cycle in and out of the labor force for family care-giving reasons, they're less likely to accumulate sizable employer-sponsored pensions, assuming they even work in jobs that offer pensions. Thus, they end up with less pension income to supplement Social Security.

Financial advisers emphasize that Social Security alone won't be enough to maintain one's pre-retirement standard of living _ which means that women, like men, need to build personal retirement savings, starting as early in their work lives as they can.

That's not easy advice to follow, especially for single heads of households in lower-paying jobs who need all their income to pay bills. Even so, financial advisers have one response to women who say they can't afford to save any money for retirement:

You can't afford not to.

Here are the stories of women from several walks of life who have heard that warning.

_ Pay yourself first.

Sharon Holmes, 32, took that message to heart last year. When she moved to a new job, she immediately put the amount of her raise into her employer's profit sharing plan.

"Instead of pocketing it, I said I'm going to ignore the fact that I got this extra money," Holmes said. "I didn't have to give up anything because I never saw it. You can't miss what you didn't have."

In just one year, by investing the added income from her promotion and a 5 percent raise, Holmes has put several thousand dollars toward her retirement. The feat is noteworthy in that she and her husband, married five years, have a blended family of six children, ages 12 to 19.

"I've been at the place of not having anything at all," said Holmes, who received job and financial counseling through the Women's Employment Network in Kansas City. "Gradually, I've become more financially sound and learned to make better decisions."

Holmes, who recently became an assistant vice president at Solutions Bank, acknowledges that at her age and with her family circumstances, "it's very difficult to focus on retirement when living in the here and now and dealing with everyday activities and needs."

But Holmes' exposure to financial planning caused her to drink the retirement savings Kool-Aid: She is a believer in paying yourself first.

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Robin Coleman, a credit manager for Bushnell Corp., is another pay-yourself-first disciple. She started saving when she was 26. At 28, she began investing in a 401(k) retirement account.

"I started to read books and educate myself on retirement planning," said Coleman, now 48. "I worked at Ford for 18 years and have a defined benefit pension that should pay $2,500 a month. But I'm still thinking that anything could happen, so I'm not counting on that alone."

Coleman is trying to save $600 a month, an amount that's made possible partly because she also branched out into investing in real estate. A single woman, Coleman started by buying and rehabbing a house, then another, and now she has several properties that provide rental income.

"I started out saving just $25 a pay period, then increased that each year by paying myself first," she said, adding that it may be "Utopia to think of saving $1 million," but she thinks she has a shot at it before she retires.

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_ Live off the interest.

Trish Tataryn also started saving for retirement in her mid 20s. In her mid-30s, she became what she calls a "disciplined" and "aggressive" saver.

Now 43, she puts money into a Simple IRA, a savings instrument available to business owners, and a Roth IRA. The owner of a laboratory that makes appliances and retainers for orthodontists, Tataryn last year put $16,700 into those two accounts.

She and her husband live on 15 acres near Weston, Mo., where they expect to pay off their home in four years. Her goal is to continue saving aggressively and retire comfortably by age 55. She and her husband want to travel throughout North America in a recreational vehicle.

"I'm hoping to live off the interest ... and anything we get from Social Security would be a bonus," she said.

To get to that point, Tataryn said, they made the decision to live frugally and stay out of debt.

"I stay away from malls and shopping centers unless I need something specific and don't tempt myself by browsing," she said, adding that they don't buy new cars, and they drive their used cars until they won't go anymore.

"I doubt anyone would ever think that we were financially fit based on the cars we drive and our lifestyle, but that is not important to us," she said, emphasizing that "we are your average Joes ... anything we have we have gotten for ourselves _ no inheritance or help from family."

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_ Reinvent yourself.

An entrepreneurial drive to build a business and take responsibility for herself propels Marti Miller, a career coach and independent fashion consultant who lives in Olathe.

Miller retired from a job with Exxon Mobil in 1992, then went to work for an outplacement company. Next, she started two consulting businesses. Now in her 60s, Miller is married to a man who is retired and older than her.

Miller said she had to acknowledge the actuarial likelihood that her husband will predecease her, so she has concentrated on her businesses to help supplement the Social Security income they're drawing now.

"My businesses play two roles in my life: They provide an alternate source of income and give me the satisfaction of helping others," Miller said. "I also think I represent the baby boomer generation who will reinvent themselves and find meaningful activities following their 'formal' retirement. We will not necessarily follow our parents' example of 'leisure' retirement."

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_ Grab the 'free' money.

Fourteen years ago, without warning, Nancy Baker's 45-year-old husband died, leaving her with two children. After the early waves of grief subsided, she dug into financial planning books and remembered that she actually likes dealing with finances.

While their children were young, Baker said, she'd often brushed aside her CPA husband's attempts to "show me his spreadsheets _ I always thought I'd pay attention later when I had time."

That time came sooner than she expected, but when it did, she found she was prepared.

"We were savers. We had life insurance policies on each other. We'd lived below our means and only spent money on things that truly were of value to us," Baker said. "And I'd always kept working, at least part time, so I was in a good position to get back into the job market."

Above all, Baker, now in her late 50s, has kept putting the maximum amount she can into the 403(b) retirement savings plans at the hospital where she works as a medical technologist.

"I keep telling the younger workers in the lab to take advantage of the 'free' money from the employer match, and I'm a big proponent of Roth IRAs," Baker said. "I started one for myself and one for each of my kids. I've been to enough financial seminars to know that the earlier you start saving, the better."

_ Turn to experts.

Mary Reusser, 59, has spent part of her adult life as a twice-divorced, single mother. After her first divorce, she said, she was employed and still felt young, holding the notion that she had many more years of work ahead before she had to worry about retirement security.

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"After my second divorce, I became more aware of the need to take care of myself," Reusser said. "I'd been investing in a 401(k) and rolling over my savings when I changed jobs, but I knew I needed more."

Reusser, a professional recruiter in the life sciences industry, said one of the best things she did was to begin a counseling relationship with a financial planner, who helps her make investment choices.

"Money, to a lot of women, is emotional. An adviser helps take the emotion out," she said. "And my adviser always tells me to take care of myself first. That wasn't always easy to do."

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ADVICE FOR WOMEN FROM FINANCIAL PLANNERS

_ Get involved in your family finances. Know your husband's income. Don't sign a joint tax return without knowing what it says. Know where his and your investments are and what they are worth. And don't use your money for everyday expenses while his goes into investments that grow. Set up your own IRA.

_ If you leave a job and take your pension out in a lump sum, do not spend it on your child's wedding or college or new refrigerator or car. Roll it over into a new retirement account.

_ Wait as long as you can to begin drawing Social Security. In a perfect scenario, wait until you're 70 to stop working. But don't rely totally on your health being good enough to continue working. Have a Plan B for what happens if you can't work. And that usually means saving more now.

_ Understand the statistical likelihood is that you will outlive your husband. If he's always handled the big financial decisions, begin to have conversations about that now. Even if you bought the groceries and wrote the mortgage checks, you may not have the big picture. You do not want to be unprepared when and if you have to make big financial decisions alone. Start educating yourself now.

_ Defined benefit pension plans are disappearing. Don't count on one being your financial security in retirement. Keep on saving as much as you can, even if you expect a defined benefit pension. It may not be there when you need it, and it may not meet your needs if stretched out over several decades of retirement.

_ Never bet on two improbables _ that you'll be married to this guy for the rest of time and that he'll be alive as long as you.

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© 2008, The Kansas City Star.