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The Bad and Good Retirement News for Women

Savings habits could be better and money pros have ideas that may help

By Richard Eisenberg

After attending the 2013 Women’s Institute for a Secure Retirement (WISER) Annual Women’s Retirement Symposium in Washington, D.C., I came away both depressed and hopeful.
WISER, a nonprofit aiming to improve women’s retirement-income opportunities and spread the word about the retirement inequities women face, brought together leading experts from financial services and research firms, government agencies and Capitol Hill.
“We don’t want retirement to be a never-ending struggle for women,” said WISER President Cindy Hounsell, named by Money in 2012 as one of its 40 Money Heroes.
(MORE: Social Security: What Every Woman Needs to Know)
Here’s what I heard about how well women are doing preparing for retirement (could be better); what Social Security is doing to assist them (also could be better), what the National Council on Aging will soon do (definitely helpful); what the Treasury Department might do (could be helpful) and what women can do to help themselves:
One Big Theme: Save More

A common theme of the symposium was that women lag behind men in what the experts call “retirement readiness.”
When the ING Retirement Research Institute studied data for plans administered by ING, it found that women have an average of $108,000 in their retirement plans, compared with $149,000 for men, said Maliz Beams, CEO of ING U.S. Retirement Solutions.
Patti Balthazor-Bjork, director of retirement research at the benefits consultant Aon Hewitt, said her firm also found that women aren’t saving nearly as much in their retirement plans as their male counterparts (6.9 percent of pay vs. men’s 7.6 percent). In addition, they’re less likely than men to contribute enough to receive their employer’s full match and they’re more likely to pull money out for hardship withdrawals.
(MORE: Mothers, Teach Your Daughters to Save for Retirement)
The upshot: “The average career employee needs to have saved roughly 11 times their final pay to replace their income in retirement, but women are only on track to replace 8.6 times their pay,” said Balthazor-Bjork. (Men are closer to the mark, but still have a shortfall.)
Disappointment From Social Security

The word from Carolyn Colvin, acting commissioner for the Social Security Administration, was also uninspiring — not about the Social Security benefits women receive, but about how well the agency is serving retirees and near-retirees.
As Next Avenue noted recently, Social Security is still working out its rules for same-sex married couples as a result of the Supreme Court’s Defense of Marriage Act ruling in June.

I asked Colvin when the agency would have an answer. “The process is moving a little slower than I would like,” she said. “Each agency is operating under a different statute. Ours is based on what state you were living in at the time you applied for benefits. We’re working with the Department of Justice and are moving as quickly as we can.” 
Colvin wasn’t pleased with how long it sometimes takes to get help at Social Security offices these days.
“I’ve gone to offices with lines around the block,” she said. “People can wait as long as one to two hours in a Social Security office if they don’t have an appointment. That’s not a level of service someone who paid into the system should expect.”
(MORE: Women Retire Earlier Than Men, But Don’t Have To)
Colvin cited budget cuts as the reason (the agency lost 12,000 employees in the past three years) and said that anyone who’s unhappy about Social Security’s service should complain to Congress.

Free Social Security Help
Wells Fargo, Kiplinger’s and the Social Security Solutions software firm, I heard, are coming to the rescue — at least for U.S. veterans.

On Veteran’s Day, Nov. 11, they’ll give veterans free access to the Social Security Solutions personalized online tool that shows them how to get the maximum lifetime benefits they’re entitled to receive.
A New Site for Older Americans

Ramsey Alwin, head of the National Council on Aging’s Economic Security Initiative, also told attendees that her group just unveiled a new site called Economic CheckUp.

It shows older Americans which benefits they’re entitled to receive and offers training and advice on getting a job.

A Possible New 'Retirement Bond'

The U.S. Treasury Department, I learned, is also considering a new type of savings bond to encourage people to put away money for retirement.

One idea is to create a new “R bond” (R for retirement). Mark Iwry, deputy assistant treasury secretary for retirement and health policy, said the bond “under serious consideration” would be specifically for people without employer-sponsored retirement plans and those without enough spare cash to interest financial firms.


“Perhaps Treasury could encourage saving through a very simple, principal-protected, safe, reassuring type of vehicle that might not interest affluent folks but would interest new savers,” Iwry said. “It might have the tax characteristics of IRAs, encouraging people to keep money in for the long-term, with the ability to roll over the money into an IRA or an employer plan, if that would be feasible.”

Retirement Advice for Women

The speakers also offered two retirement-savings tips for women:

Figure out how much your savings would translate to in monthly retirement income. “Starting at age 50, every woman should complete a retirement-income analysis and update it annually,” said Beams.

If your employer will match some or all of your contributions to its retirement plan, don’t pass that up. “If you don’t take advantage of the match it’s like saying ‘I don’t want a raise,’” said Balthazor-Bjork.

I'd also suggest women check out the WISER site, which has some very useful advice.

Oh, and one more thing: Wells Fargo’s actuaries just adjusted their calculations to take into account people who will live to age 150, said Karen Wimbish, director of retail retirement for the firm.
As if it wasn’t already hard enough to make your money last a lifetime.

Photograph of Richard Eisenberg
Richard Eisenberg is the former Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue and former Managing Editor for the site. He is the author of "How to Avoid a Mid-Life Financial Crisis" and has been a personal finance editor at Money, Yahoo, Good Housekeeping, and CBS MoneyWatch. Read More
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