Specialized Services for Women Investors

Addressing the specific needs of working women

Women face unique challenges in financial planning. Many women spend less time in the workforce than men as their careers are often interrupted to care for children or their aging parents. Women also tend to earn less money than men with similar experience. As a result, women's retirement plan balances, Social Security benefits and pension benefits are often lower.

In addition, because women generally live longer than men, they face the challenge of stretching their resources and retirement savings over many years. A study by Oppenheimer Funds concluded that 80% to 90% of women will become fully responsible for their finances at some time in their lives.

We understand the unique struggles women face. We have step-by-step guides to help women work through difficult life issues including the loss of a spouse or parent, divorce, retirement planning, education savings plans, single income budgeting, and more.

Reasons women give for failing to plan for retirement

We find that women often offer a variety of reasons why they haven't made concrete plans for retirement.

“I'm too busy.”
We understand that sometimes the demands of today simply make it hard to focus on tomorrow. But failing to plan adequately now can mean shortchanging yourself later. We urge our clients to commit to a goal of saving for a comfortable retirement and then plan and prepare accordingly.

“My husband takes care of my finances.”
Married or not, it's critical for women to take an active role in planning for retirement. Otherwise, you may be forced to make important financial decisions quickly during a period of crisis – decisions that are not well thought out and may prove costly later. Preparing for retirement with your spouse will help ensure that you're both provided for and help pave the way toward a worry-free retirement.

“I'll save money once my children are through college.”
Many well-intentioned parents put their own retirement savings on hold while they save for their children's education. But doing so can jeopardize future financial security. Your children have many options when it comes to financing college – loans, grants and scholarships, for example – but there's no such thing as a scholarship for retirement!

“I don't know enough about investing.”
A vast range of educational and information resources are available to help you learn about investing. More important, we view client education as a crucial aspect of our role as financial advisors. We are always happy to help our clients become better informed about the work of investing and wealth management.

Women's retirement income: The numbers

The possibility of outliving your retirement income is a realistic concern for many women. At age 65, women can expect to live, on average, an additional 19.8 years.* In addition, many women will live into their 90s, which means that retirement could last at least 20 to 30 years.

Women should also consider the possibility that they will spend some of those years alone. According to recent statistics, 43% of older women are widowed, 11% are divorced, and approximately half of all women age 75 and older live alone.* For married women, the loss of a spouse can mean a significant decrease in retirement income from Social Security or pensions. So what can you do to help ensure you'll have enough income to last throughout retirement? Here are some tips:

• Estimate how much income you'll need. Use your current expenses as a starting point, but note that your expenses may change dramatically by the time you retire.
• Find out how much you can expect to receive from Social Security, pension plans and other sources. What benefits will you receive should you become widowed or divorced?
• Set a retirement savings goal that you can work toward, and keep track of your progress.
• Save regularly, save as much as you can and then look for ways to save more – dedicate a portion of every raise, bonus, cash gift or tax refund to your retirement savings.
• Consider purchasing long-term care insurance to help protect your retirement savings and income from the high cost of nursing home care.

*U.S. Department of Health and Human Services Administration on Aging, A Profile of Older Americans: 2006

The value of starting to save now

Even if you're staying at home to raise your family, you can – and should – continue to save for retirement. If you're married and file your income taxes jointly, and otherwise qualify, you may open and contribute to a traditional or Roth IRA as long as your spouse has enough earned income to cover the contributions. Both types of IRAs allow you to make contributions of up to $5,000 in 2008, or, if less, 100% of taxable compensation. If you're age 50 or older, you're allowed to contribute even more – up to $6,000 in 2010.

To help maximize your chances of achieving a financially independent retirement, start with a realistic assessment of how much you'll need to save. Using our Retirement Needs Calculator will help you establish a general idea of the amount you will need to save depending on the age you wish to retire. Don't be discouraged if the figure is substantial; the most important thing is to begin saving now. Although it's never too late to save for retirement, the sooner you start, the more time your investments have for potential growth.

The chart below shows how just $2,000 invested annually at a 6% rate of return might grow over time:

This is a hypothetical example, and does not reflect the performance of any specific investment. Results assume reinvestment of all earnings and no tax. To test the potential return of smaller or larger annual investments also with compounding interest and no tax consideration use this Savings Calculator.

If your employer offers a retirement savings plan, such as a 401(k) or a 403(b), join it as soon as possible and contribute as much as you can. It's easy to save because your contributions are deducted directly from your pay. Some employers will even match a portion of what you contribute.

If your employer offers a pension plan, find out how many years you'll need to work for the company before you're vested in, or own, your pension benefits. Women struggling to balance work and family sometimes shortchange their retirement savings by leaving their jobs before they become vested in their pension benefits. Keep in mind, too, that because your pension benefits will be based on your earnings and on your years of service, often the longer you stay with one employer, the higher your pension is likely to be.

*Some information on this page has been provided to us by Forefield, Inc., an independent third party. Raymond James Financial Services, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.

For more information on these topics, contact us or visit Where to Learn More.

Women's Institute for Financial Education (W.I.F.E)
Social Security Administration Articles on Women's Issues
A Working Woman's Guide to Financial Security
Explore Other Resources about Women and Investing