Cents and Sensibility


Saving for retirement
especially vital for women

Despite much progress in the last decade, American women executives still earn only two-thirds as much as men, according to a study by the Korn/Ferry International executive search firm and the University of California-Los Angeles.

Although many forecasts suggest that pay parity is coming, the pay gap means several generations of women, from those starting work today to those who have been working for 20 to 30 years, could find themselves shortchanged in retirement income as well. Consider these facts:

>> Men's annual retirement income, including all sources, averages $10,450 compared with just $6,020 for women. Because women live an average of seven years longer than men, they're more likely to face the problem of outliving their assets. In fact, women are twice as likely as men to die poor.

>> It can be more difficult for women to save for retirement because they earn less throughout their careers. Women have to save a higher percentage of their income to ensure a comfortable retirement.

>> Only 50 percent of working women have pensions. This is partly because women are more likely to work in smaller businesses that do not offer pension plans. Also, women often leave the work force when they have children and rejoin later, or move with a spouse, so they may not stay with one employer long enough to be vested in a retirement plan or to accumulate much in a company plan.

>> At one time or another, 90 percent of women become wholly responsible for their own financial welfare.

>> Nearly 75 percent of the elderly poor are women.

>> Eighty percent of retired women are not eligible for pension benefits.

>> Many older women are placed in financial jeopardy through widowhood or divorce.

Despite these statistics, women can take control of their financial futures by implementing a few basic strategies. These include developing a plan and sticking to it, paying themselves first, systematically investing for the long term, taking the time to learn about basic investments, sheltering their retirement dollars from taxes, diversifying their investment dollars and using professional advice.

The time to plan and invest for your retirement is now. Start today.

Guy Steele is a financial planner and head
of the Pali Palms office of Edward Jones. Send
planning and investing questions to him at 970
N. Kalaheo Ave., Suite C-210, Kailua, HI, 96734,
or by email at:

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