During this Mother's Day season, we think fondly of the many wonderful things that our own mothers, and the other ones we know, have done for all of us.
As we reflect, it's important to keep in mind the sacrifices that all mothers have made. For example, women are still far more likely than men to make career concessions in order to raise their families. Furthermore, even women who work full-time still earn less than men, on average. While we have made some strides toward achieving fairness in pay, we're not there yet.
In short, if you're a woman - whether you have children or not - you are going to have special financial considerations, especially in the area of saving for retirement. Consider these factors:
* More than 80 percent of all women will be solely responsible for their own finances at some point in their lives - mostly as they get older.
* On average, men collect $10,450 in retirement income, from all sources, compared to just $6,020 for women.
* Because women live an average of seven years longer than men, they're more likely to outlive their assets.
* Only 50 percent of working women have pensions. Women are more likely to work in smaller businesses that do not offer pension plans.
You get the picture. You simply must take significant action on your own behalf if you are going to enjoy a comfortable financial future. Fortunately, there are many steps you can take. Here are just a few:
Pay Yourself First
Every time you get paid, turn around and write out a check to whatever savings or investment vehicle you have chosen - before you pay any other bills. Better yet, take advantage of payroll deduction, bank authorization or systematic investment plans so that your money is automatically invested before you even receive it. Such a plan, however, does not assure a profit and does not protect against loss in declining markets.
Invest For Growth
To achieve your retirement goals, you may need to put some of your investment dollars into "growth'' vehicles, such as stocks or stock-based mutual funds. Historically, stocks have appreciated more than other types of investments. More importantly, other types of investments, such as CDs or Treasury bills, may not even keep up with inflation, so you could end up losing purchasing power if your portfolio is not well-diversified.
Take Full Advantage of Available Retirement Plans
Save on a pre-tax basis through your employer's 401(k) or by making IRA contributions. If you can't deduct an IRA contribution, consider a Roth IRA. Contributions to a Roth IRA are not deductible, but a Roth does offer tax-free income at retirement under certain circumstances. If you are self-employed, a Simplified Employee Pension Plan (SEP) or other qualified retirement plan may offer you a business tax deduction.