Making retirement a reality series: Part four

What should women know about retirement?

The previous articles in this series highlighted a variety of topics for successful retirement savings. This article will identify retirement saving tips specifically for women.

Per the U.S. Department of Labor Employee Benefits Security Administration, when addressing the topic of women and investing there are a few things to consider:

  • A female at the age of 65 can expect to live another 20 years.
  • Women are more likely to work in part-time jobs that don’t qualify for retirement plans.
  • Working women are more likely than men to take time off from their careers to care for family members.
  • Only 45 percent of the 62 million wage and salaried working women in the U.S. participated in a retirement plan.
  • Women work fewer years, contribute less towards retirement and have lower lifetime savings.
  • Women tend to invest more conservatively than men.

So, what can women do to prepare for financial security in later life? The U.S. Department of Labor suggests the following:

  • If your employer offers a retirement plan, start participating right away and contribute as much as the plan allows. Some companies offer a matching retirement program (i.e. they will match a fixed percentage of an employee’s contribution). This is like getting free money for your retirement.

(Tip: The sooner you can start saving for retirement the better, due to compounding interest. You will earn interest on the money you save plus the interest you have accumulated!).

  • Understand the vesting terms of your employer. Vesting is the amount of time that an employer requires employees to work before they are able to earn the right to benefits of a savings or pension plan.    
  • Keep your employer sponsored retirement program summary plan description (SPD) and any amendments provided to you regarding this plan. This document explains your benefits, how they are calculated as well as any financial penalties should you decide to retire early.
  • If you are vested in your retirement plan and choose to change jobs make sure you understand the rules of your plan (i.e. consult the SPD). Some employers may allow or require you to take your retirement benefits in a lump sum, while others may not allow you to take it until you retire. If you do receive your retirement benefits in a lump sum, to avoid additional income taxes and potential penalty taxes, it is recommended that you reinvest your benefits into another qualified retirement plan or an Individual Retirement Account (IRA), and have the check sent directly to the plan you choose. The new plan will provide the required forms for this transfer and often have representatives available should you need assistance. To learn more about this process visit the United States Department of Labor.
  • If your employer does not offer a retirement saving program, anyone receiving compensation or married to someone receiving compensation can contribute to an Individual Retirement Account (IRA). To learn more about IRA’s visit

For additional retirement saving tips for women visit the United States Department of Labor. For a variety of financial resources, including how to assess your financial health visit Michigan State University Extension.    In addition, Michigan State University offers money management and homeownership classes. For more information about classes offered in your area visit MI Money Health.  

Other articles in this series:

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