The recent stock market slide may make you too nervous to look at your retirement account, but now more than ever you need to make sure you have realistic expectations for what you will need in retirement and compare that to how much you are saving each month.
Do you know how much you need to save each month for retirement? Jean Chatzky, More Magazine's finance columnist suggests: "Not sure how to do the calculations? Try the Ballpark E$timate at Choose to Save."
Women vs. Men
Many women need to shift the way they think about money and become at least as savvy as men with their retirement savings plans. Why? For starters, women are living longer than men. Yet men think they need to save more for their retirement. Women on average only earn 77 cents on the dollar compared with men. Plus women are more likely to be employed in jobs that are not covered by company retirement and pension plans. Married couples may assume they are better off, but they need to also consider what happens to the surviving spouse–often the wife. According to WSJ.com:
"Because women, on average, outlive men by three to four years and face longer periods of disability later in life, the financial situation of a widow can be especially precarious."
A recent study conducted by Harris Interactive last fall of middle class women in their mid-20s to those already retired in their 60s found that women estimate they only need $200,000 for retirement while men estimate they need twice as much, $400,000.
According to a Reuters interview with Karen Wimbish, head of retail retirement for Wells Fargo, one of the interesting results of the study is:
"When you look at women aged 40 to 69 –- these are women who should be starting to think about retirement; retirement is knocking at their door; or they are in retirement –- 30 percent said they couldn’t estimate how much they will need to withdrawal from retirement savings annually. They either hadn’t thought about it or didn’t know. That’s head-in-the-sand behavior."
This study suggests women need to re-evaluate their savings plans and calculate how much they will really need to retire.
Here are a few online finance calculators to help you plan for retirement:
- Beyond Today - Financial Perspectives for Life
- Ballpark E$timate
- Retirement Personality Profiler
- Living To 100 Life Expectancy Calculator
- Payroll Deductions Calculator
- Debt Management Calculator
- Retirement Planner Calculator - CNN
(Illustration above by me, Chris Olson © 2011.)