7 Steps to a Secure Retirement for Women

While I was doing research for my new book, Not Your Mother’s Retirement: Secrets for Today’s Women to Live Fully During the Best Years of Life a startling statistic caught my eye: According to a study from Allianz Life Insurance, 49 percent of all women in the United States share a common fear: becoming a bag lady in their later years.

Why does this worst-case-scenario haunt women across the socioeconomic spectrum, and what steps can be taken to ensure this fate is avoided?

Many women are so busy they don’t have time to think about their own needs and to proactively prepare for their own retirement. In fact, research from the Transamerica Center for Retirement Studies reveals that only 29 percent of boomer women have made saving for retirement their top financial priority. 

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That was one of the central reasons I developed Not Your Mother’s Retirement, a practical resource to help women in their 40s and 50s plan for a successful retirement. It has 20 essays by distinguished retirement experts (including Next Avenue work and volunteering blogger Nancy Collamer) on a wide range of topics including financial planning, work, health, travel, housing, education, volunteering, being single, spirituality and caregiving. 

I gave the book this title because the whole concept of retirement is so radically different from the way our parents’ generation viewed it — the options are greater and the opportunities to be active and do something meaningful have increased exponentially.

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Here are seven tips from the authors that are crucial to planning a fulfilling second half of life:

1. Estimate how much money you’ll need in retirement.  M. Cindy Hounsell, president of WISER, the Women’s Institute for a Secure Retirement, says that few people ever take the time to figure out how much they’ll actually need to live on in retirement. "For a quick, back-of-the-envelope approach, look at your current income after taxes and multiply by 20 or 30 years,” she says. This approach doesn’t deal with inflation or unexpected health costs, Hounsell notes, but is a quick way to back into the bigger numbers.

2. Take advantage of bad stock markets. “Investing small amounts of money regularly, even $100 a month, makes a difference over time,” writes Julie Jason, founder of Jackson, Grant Investment Advisers in Stamford, Conn. “Take advantage of bad markets by investing small amounts of money as markets decline.”

Jason provides a stunning example of how a long-term approach pays off: If you invested monthly in a mutual fund mimicking the S&P 500 Index beginning October 1, 2007 and sold out on March 31, 2009 because of the market meltdown, you would have lost more than 57 percent. But if you didn’t sell and kept investing monthly through September 30, 2013, your average annual return would have been 12.8 percent.

(MORE: Avoid These 5 Money Pitfalls of Pre-Retirees)

3. Find a financial adviser to help you get on track. Sara Zeff Geber, a life-planning and transition coach for boomers based in San Francisco, says that if you don’t have a financial planner or adviser, “ask for referrals from friends and co-workers.” She also suggests checking out the website of the Financial Planning Association, fpanet.org, to find an expert near you.

4. Look into alternative housing options. Sally Abrahms, a writer specializing in boomer and senior housing who blogs for AARP, says there are plenty of them and there’ll “be more down the road.” One of the “coolest housing models,” she says, is cohousing, where a group of people buy land together and help design their community.

“There are 20 or so private homes clustered together with welcoming front porches that face one another, to foster community as well as informal, daily interaction,” Abrahms writes. Residents own or sometimes rent their homes or condos and jointly own outdoor space and a “common house.” The appeal, says Abrahms: “There’s as much privacy (you have your own place) or group time as you want.”

For more information, she recommends visiting the websites of the Cohousing Association of the United States and The Cohousing Company.

5. Learn about “caring communities.” To avoid isolation in retirement, Dorian Mintzer, a leading retirement authority based in Boston, advises joining one of the growing number of Web-based and community-based models for “caring communities.”

For example, Mintzer says, The Transition Network has developed a program called The Caring Collaborative, which has become a model around the country. “People help others, knowing that they can also count on being helped when the need arises. This is particularly helpful for women living alone,” writes Mintzer.

A Web-based caring community she recommends is Lotsahelpinghands.com, which Mintzer used to help coordinate care when a friend was sick.

6. Consider an encore career — a second act for the greater good. “If you’re going to work another 20 years, know that the best investment you may be able to make is in your own skills and training,” writes Marci Alboher, a vice president at Encore.org and author of The Encore Career Handbook. “Embrace the chance to give yourself a skills-and-education makeover, so that you are the best version of yourself as you figure out where to make your mark."

7. Engage in lifelong learning. Kali Lightfoot, executive director of the National Resource Center for Osher Lifelong Learning Institutes (OLLIs) advocates feeding your brain in retirement through adult-learning programs. “You’ll be able to put your curiosity and passion to good use,” she writes.

Two ways to find out about lifelong-learning institutes near you: the websites for the Road Scholar Institute Network and Lightfoot's National Resource Center for Osher Lifelong Learning Institutes.

Note: All the contributors to Not Your Mother’s Retirement provided their essays on a pro-bono basis since all royalties generated from the sale of the book will be donated to nonprofits dedicated to preventing and curing cancer.