According to the Employee Benefit Research Institute (EBRI’s) 2011 Retirement Confidence Survey, more than half of the 1,260 respondents surveyed were not confident that they’d be able to afford the retirement they desire. While the survey registered the lowest level of confidence among workers in 21 years, results were particularly bleak for women who reported being less confident than men about retirement. From an advisor’s perspective, the lack of confidence women express seems understandable. The EBRI report found, for example, that 35% of women surveyed believed they will need less than $250,000 to fund retirement. This compares with just 26% of men who figure $250,000 is enough to support them in their golden years. More problematic, 12% of women compared to just 5% of men said they do not know how much they will need to save for retirement.
Women falling short on their retirement estimates and failing to plan ahead is even more troubling considering that women live longer than men and, therefore, need to save more for retirement. Consider these facts: The Women’s Institute for a Secure Retirement reports that there are six million more women than men ages 65 and over in the United States. What’s more, according to the U.S. Census Bureau’s “Current Population Survey, 2010 Annual Social and Economic Supplement,” today 57% of American women 65 or older, compared with just 26% of elderly men, live alone and shoulder all the financial responsibility of monthly bills, real estate taxes, and the home’s upkeep.
If you are a woman seeking to boost your retirement confidence, your first step should be to maximize your contributions to your tax-advantaged retirement savings accounts, from 401(k)s to IRAs. And, if you are older than age 50, make the maximum catch-up contributions. Also, review your investment strategy to ensure it reflects your risk tolerance and is designed to fund your short- and long-term financial goals. In my experience tying specific goals to savings is a powerful motivator.
And it is also recommended that you consult your financial advisor and discuss strategies you should consider before or during retirement.