Retirement Planning For Women – How Much Is Enough?

Women need to save more money for retirement than men. Yet they generally have less disposable cash to set aside. And what they do save, they tend to invest too conservatively.

On average, according to the U.S. Census Bureau, women live longer than men, work fewer years, change jobs more frequently, earn less and are more likely to work part-time. All these factors mean that saving for retirement is more even important for women than for men.

Because of these factors, women 65 and older are twice as likely as older men to have incomes at or below the federal poverty level.  And about 20 percent of elderly women living alone are poor, versus fewer than 5 percent of older married couples, the Census Bureau says.

How much is enough?

When saving for retirement, don’t just save the minimum necessary to get by. Save enough so you can visit the grandkids, tour the country on a Harley or play golf every day—whatever you’ve always wanted to do.

Since people are living longer and lead healthier and more active lives, you might want to plan to replace 100 percent of your annual income for retirement. To determine how much to save consider your retirement lifestyle, your income, your company pension, how long until you retire, how long you can expect to live, the rate of return on your investments and how much you’ve already socked away.

Most personal finance magazines like include a retirement worksheet on a regular basis—you can find back issues at your local library. Better yet, you can visit the US Department of Labor’s website and complete the worksheet online. They’ll do all the calculations for you, and in a few minutes you’ll have a ballpark estimate of how much you’ll need to retire and how much you should be saving each year to reach your goal.

Don’t worry if the number seems unreachable now. Start a sensible retirement savings plan today and slowly work toward that goal.