Women need to save more for retirement

Once upon a time, only men wore the financial pants in the family. Now, however, more and more women are finding themselves in charge of their financial futures. Whether it be through the death of a spouse, divorce or loss of a job, women are serving as the heads of their households more than ever before.

According to an Oppenheimer Funds survey, between 80 and 90 percent of all women believe they will be solely responsible for their financial well-being at some point in time. Chances are, they will. The U.S. Bureau of Labor Census reports that women live an average of seven years longer than men, the average age for widowhood is 57, and the number of female-headed families has jumped more than 37 percent since 1980.

The challenge of planning a secure, financial future is particularly difficult for women. Women live longer and can expect to be retired approximately 25 percent longer than men. Also, various research suggests that on average, single women will have less than one-third of the annual income they need for a comfortable retirement, in large part because women save only 1.5 percent of their current income. Women also tend to have a more conservative approach to investing and invest less than half as much in stocks as men.

To prepare for a comfortable financial future, women need to save more of what they earn, begin saving earlier, and they need to make that money grow. Here are some suggestions for women investors interested in taking control of their financial house:

?Educate yourself. The smart investor is the educated investor. The easiest and most inexpensive way is to read. There are numerous financial publications like The Wall Street Journal or Kiplinger's Magazine that cover the gamut of investment topics. Also, take time to attend investment seminars the more you know about investing, the easier your investment decisions will be.

?Determine your financial goals and resources. Before you can create an investment plan, you need to have a clear picture of your financial standing. You can begin this process by drawing up a budget with a detailed listing of your income, assets, savings, expenses and long-term debt.

After assessing your current situation, a financial goal will help put your investment plan in perspective. What are you looking to achieve: Create a comfortable retirement, add to your current income, help with your family's intermediate costs, create a reserve fund?

?Create a systematic investment plan. The sooner you can implement an investment plan, the faster your money can start to work for you. Once you have established a systematic plan, stick to it. Make your investments a priority. Consider it another monthly bill you have to pay. You should also periodically review your investments' progress and make sure they still match your investment objectives. Paying yourself first can benefit you later in life.

Too many times, women are first confronted with financial decisions during a crisis: divorce, illness or death of a spouse. Recognize the importance of taking control of your financial future and learn how to do so now.

(The preceding article was provided by A.G. Edwards & Sons Inc., member SIPC.)

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