Spotlight: Women fear they lack money for retirement

Women fear they lack money for retirement

By Anna Marie Kukec | Daily Herald Staff
Published: 3/19/2008 12:12 AM

For about 59 million working women nationwide, it’s something they may never attain, or they could outlive it.

Retirement savings.

“There’s a real strong focus now on whether women are really prepared. And all the data says no,” said Ruby Haughton-Pitts of Chicago, a member of AARP’s Executive Council in Illinois.

Retired women are more likely to be poor than elderly men, and the risk of poverty increases with age. After all, women, on average, earn less during their working life and often outlive men, she said.

“What’s happened here is there have been no real tools in one place where women can use them,” Haughton-Pitts said.

She’s hoping that changed Tuesday when AARP Illinois, along with the Illinois state treasurer’s office and the U.S. Department of Labor’s Women’s Bureau used Women’s History Month to launch new retirement planning information online for women.

The Labor Department’s new Wi$eUp program, the treasurer’s Tomorrow’s Money Web site and AARP’s planning and education resources are available to help, they said.

The online tools could help estimate how much is needed for retirement; how to manage existing savings; how to take advantage of tax incentives for savings; and how to protect money from losses through identity theft, fraud and scams.

Together, the groups want to bring more awareness to a growing concern that many women will not be prepared as they reach retirement age.

The groups also want to help women access resources to learn how to save more; encourage better participation in retirement plans; and increase their contribution rates in existing retirement plans.

Less than one in three women in Illinois receive income from pensions, according to the Institute for Women’s Policy Research.

In addition, a survey released Tuesday by Bloomington-based Country Financial said a gender gap exists on saving for retirement, said Keith Brannan, vice president of financial security planning for Country, which has several offices throughout the suburbs.

“Women have become more pessimistic since last year about their ability to save for a secure retirement and most feel pressure on short-term savings,” said Brannan.

The survey, which had about 3,000 respondents nationwide, found men’s biggest fear about retirement was not having the resources to do what they would like to do (47 percent), while women were closely split between the same concern (37 percent) and worrying that they will run out of money (36 percent).

Also, men were much more likely to say they have taken adequate steps to alleviate this fear (61 percent), compared to women (48 percent).

Women have earned less, often started later saving for retirement and could live seven to 12 years longer than their husbands, Brannan said.

“It takes a lot of planning and prioritizing,” said Brannan. “If people don’t accept that burden, they won’t feel financially secure for retirement.”

Financial advisers have also observed similar dynamics among their clients. Women tend to be more concerned about retirement, while men seem to be overconfident, said William E. Dever Jr., financial adviser with JMG Financial Group Ltd. in Oak Brook.

“There seems to be this ‘bag lady’ fear that I have repeatedly heard women joke about,” said Dever. “However, I tend to believe that there is more truth to this fear than people will sometimes admit. Some clients who have done a really good job of accumulating (wealth) still do not really believe it will be enough. This seems to be a little more likely to be the sentiment of a woman, but not exclusively by any means.”

The Country survey findings were not surprising, said Mark La Spisa, co-founder of Vermillion Financial Advisors Inc. in South Barrington.

“Asking the general population if they are concerned and if they think young people should save, and when, is all good,” La Spisa said. “But getting people to start to have good financial habits is a whole different issue.”

La Spisa advised people to review their personal finances and update retirement projections annually and review investment holdings quarterly.

“If you can find a pool of people that do this, I would bet the confidence factor would be in the 80 percent to high 90 percent range,” La Spisa said. “The question to me then, is how can we expect anyone to be confident about something they give little or no attention to?”

Retirement concerns for women

Of the 59 million women currently earning a salary nationwide, less than half, 47 percent, have a retirement plan, according to the U.S. Department of Labor’s new Women’s Bureau.

Nearly half of all women work in jobs without retirement plans or 401(k)s, said the Women’s Institute for a Secure Retirement.

A retired woman’s median income in 2004 was $12,080, compared to $21,102 for men, according to the institute.

On average, a woman’s monthly Social Security benefits check is $824, compared to $1,195 for a man, according to AARP. Help online

The U.S. Department of Labor’s Women’s Bureau launched a new Web site Tuesday at www.wiseup

The state treasurer’s office’s also has a new Web site, www.illinois.

AARP educational tools and materials are at

Women fear they lack money for retirement – Vermillion Financial Advisors, Inc.

Women fear they lack money for retirement