Women Less Prepared For Retirement

(CBS)  Forty-eight year old Michelle Sullivan has in a Ziploc bag a reminder of years spending - not saving, CBS News correspondent Kelly Wallace reports.

"Lookie there, I had 40 credit cards," she said. "$30,000 of debt."

Kim Prince, 36, has two little reminders of why she hasn't been saving.

"For two years, I didn't make a salary. I paid myself with my savings account," she said. "And now that's gone."

Neither Sullivan nor Prince set aside much for retirement - neither thought about it.

"I pretty much stopped worrying about that when I met my husband because he was financially secure," Sullivan said.

"I guess I was in denial, it just, at that time, when I was like in my 30s, it was like, okay, you know, you think, naïve," Prince said.

A recent report found women - like Sullivan and Prince - are less prepared for retirement than men.

Women live three years longer in retirement than men on average, which means they actually need more money for retirement. But they actually start saving later by two to four years, invest less - 7.3 percent of pay in 401(k) versus 8.1 percent for men -- and invest more conservatively.

"Women are always multi-tasking. And so you are at your job, you're with your kids, you are worried about your parents, you're not thinking about retirement," said Beth Kobliner, author of "Get a Financial Life." "That's why this kind of report is a wake-up call."

Experts say: start early.

Saving $1,000 a year from age 24 through 65 would give you nearly $300,000 at retirement. But if you wait, and start at 35, you'd have $125,000 - half of what you would have if you had started earlier.

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Couric & Co. Blog: Kelly Wallace shares more important saving and investment advice for women.

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Two years ago, Sullivan, newly divorced, started attending workshops where she learned to cut back on spending and consolidate credit card debt.

Since then, she bought her dream house, has paid off most of that $30,000 credit card debt - and opened up a retirement account.

"I would tell my daughters that learn now to save, don't get a whole lot of credit cards like I did," she said. "Learn how to invest your money the smart way."

Prince is taking that advice. She's beginning to put some of her part-time income into her own retirement account.

"Now I think, 'what have I been doing wrong and how can I fix it?'" Prince said.

Making a financial correction now to ensure their golden years are as rich as a man's.

[tngreen]

Most of the women I know are using their money to pay bills, not to run to the mall every payday. Since women earn about 60 cents to every man''s dollar, but yet we have the same expenses, is it any wonder that we don''t have as much left over to squirrel away for retirement? You don''t have to be a CPA to do that math! DUH!

Sheesh.

[loudpipes3]

Thank you libra127 for your information. I had NO idea how it worked, and no one ever took the time to show me. But, up until my late years, I had not much willingness to learn how to invest. You have shown me a new light. I have not done any investing except for an annuity that my employer started for me. - All I have done is save money for many years; since 1987, & put it in a safe. I have a lot of it now, but all these years it has just sat there, doing nothing. - I am going to an investment firm & learn how to invest it wisely. - I have only 6 years till retirement; - not much time, but by the same token, I also have a WHOLE LOT of money to work with!!! ---Thank you again, for your advice!

[morganbarber]

Some women feel about retirement planning the same way some men feel about cooking. Its just something that "someone else needs to be doing for me."

[morganbarber]

Some women feel about retirement planning the same way some men feel about cooking. Its just something that "someone else needs to be doing for me."

[morganbarber]

Some women feel about retirement planning the same way some men feel about cooking. Its just something that "someone else needs to be doing for me."

[morganbarber]

Let me tell you how much sympathy I have for women without an adequate retirement plan. ZERO. If a woman marries a man who can provide her with a retirment plan, she needs to make sure he remains happy with her. Thats the part THESE WOMEN often forget about. They get fat and lazy, and expect the gravy train to go on. They keep maxing out those credit cards. Then they are divorced with no more gravy train. Then there is a lot of bellyaching about how unfair it is for older women to have to earn a living. Some women don''t get married, but believe that a retirment plan will just appear someday. In the meantime, they keep maxing out those department store credit cards. When women are shamelessly materialistic, its not shallow. But when men are sexually shallow, well its just despicable. When you see a woman 50 or over struggling to survive, remember that she created her own trap.

[whiskyrocker]

All I know is my wife is set for retirement. She took 1/2 mine. Biccchhh

[libra127]

Turning $41,000 into $300,000 in that length of time is unbelieveable to me, - unless you are doing something illegal! ---Tell me now.

Posted by loudpipes3 at 08:24 PM : Jul 17, 2008

It works due to the amazing power of compounding over long periods of time. You earn money not only on your contributions ($1000 a yr) but also on your earnings, year after year!

The given example assumes some rate of interest on your savings. With a calculator, I did the math in a few minutes assuming a 7% interest rate. At the end of 41 years, the accumulated total was about $215,000. So the example must have assumed a slightly higher interest rate.

You may have to try it yourself to believe it. Using 7% interest: the first year you earn $70 on your $1000 contribution. The 2nd year, you contribute another $1000 so you earn 7% on $2070, or $145. The 3rd yr, you contribute another $1000 and earn 7% on $3215. Keep doing this for 41 years and it grows remarkably. Thats why it''s smart to start saving early.

[loudpipes3]

I would LOVE to know how, at saving $1000 a year, from age 24 through 65 makes $300,000 ?????
Even with wise investments, their is NO WAY that amount can be reached, - in that timeline! --- That is only 41 years! ---Turning $41,000 into $300,000 in that length of time is unbelieveable to me, - unless you are doing something illegal! ---Tell me now.

[keithle1]

40 credit cards!!!