Last Updated May 28, 2010 1:44 PM EDT
Dear Jill,According to The National Center for Women and Retirement Research, 90% of women are responsible for their own finances at some point in their lives. Sarah, I hate to tell you this, but you really do need to understand what you have as a couple, and more importantly, you might want some input into how your mate is planning for retirement.
I am 54 years old and my 60-year old husband handles all of our money--from paying the bills to investments. We both work full time and it feels like a good division of labor because he seems to be good at it and I hate it. I think we're doing well financially, so do I really need to poke my nose into the details of what he's doing with our portfolio, etc.?
I discussed some of the issues that should make women wake up and smell the financial coffee with reporter Sumi Das recently. To all of my sisters out there: please, please do take the time to understand your money and create a plan for achieving your goals.
Here's another question from Debbie T in NC:
I'm a 58 year old single woman with a pretty good financial outlook. I have no debt, own my condo and religiously put 15% of my salary into my 401 (k). The problem is that I literally have no idea what I'm doing in terms of the investments. Help!!Almost everyone knows that saving for retirement is important--like eating a balanced diet and exercising. Thankfully, Debbie seems to be on a pretty good path, but recent data from EBRI notes that the median retirement account balance for heads of household ages 55-60 is approximately $80,000. We all know that's not going to last too long, so Americans need to get busy!
On Debbie's second point, it's just shameful that there isn't more independent investor education out there for retirement plan participants. Usually once a year, you get some guy from the fund company to talk about the plan, blah, blah, blah, but very little sinks in.
That's probably why many participants don't understand many basic investment basics. According to the Michigan Retirement Research Center, 64% of Americans over the age of 55 did not know that bond prices rise when interest rates fall. That's crazy, especially considering that bond funds are in every single retirement plan!
OK, so here's what Debbie needs to do: contact her HR department and see if they are willing to get an independent third-party educator to help out. If not, the burden is on Debbie to go to the plan web site and poke around there to find some building blocks for her financial education. I'll be blogging more about those first steps, but I would be remiss if I didn't mention that Jane Bryant Quinn, the goddess of all things financial blogs for us here and her financial bible, Making the Most of Your Money, is a comprehensive guide to personal finance. Don't just take my word for it -- Consumers Union named it as the best personal finance book on the market!