Social Security: Women can’t forget about planning for retirement

By Jim Glenn

Do men or women need to save more money for retirement?

Many financial planners say women need to save more because, on average, they live longer than men. Women reaching age 65 in 2004 are expected to live an additional 20 years – or four years longer than men.

Longer life spans mean women will have to make their savings and investments last longer.

The best way to do this is to begin planning early and carefully for your retirement years. And the best place to begin is by knowing what you can expect to receive from Social Security and how much more you will need to enjoy a long and comfortable retirement.

Most financial advisors say you will need about 70 percent of your pre-retirement earnings to maintain your pre-retirement standard of living comfortably. Under current law, if you have average earnings, your Social Security retirement benefits will replace only about 40 percent, so you will need to supplement your benefits with a pension, savings or investments.

Of course, every situation is different. Here is what you should do to find out what you can expect from Social Security, and how much other income you may need.

Each year, every worker age 25 and older is mailed a Social Security Statement. Read it carefully because it is a road map to your personal financial future. It shows how much you and your family can expect to receive from Social Security when you retire, or if you become disabled or die.

You should also visit Social Security’s financial planning Web site at www.socialsecurity.gov/planners.

You can use the calculators there to test different retirement ages or different scenarios for future earnings amounts. It also provides detailed information about how marriage, widowhood, divorce, self-employment, government jobs and other life or career events can affect your Social Security. And it includes a link to a non-Social Security worksheet that will help you decide how much you need to save and invest for a comfortable retirement.

If you want more information about the role of Social Security in women’s lives today, Social Security also has a booklet that you may find useful.

It is called Social Security: What Every Woman Should Know. You can find it online at www.socialsecurity.gov/pubs/10127.html. Or you can request a free copy by calling 1-800-772-1213.