40licious Money: Women Aren't Putting Enough Away for Retirement

Every little bit counts. I bet she's got about $40 in here.

Ladies. Ladies! We need to talk. But that is why you're here, yes?

Wells Fargo did a study on how well women prepare for retirement and found that we are sorely lacking in the financial fitness department. A key finding: "Almost 30% of women between the ages of 40 and 69 are 'not sure or can’t estimate' how much they will need to withdraw from their retirement savings annually while in retirement, and about 32% of women in their 40s and 50s estimate they will withdraw 11% to 30% or greater each year."

The survey also showed that in addition to increased household tension since the recession began, "Women in their 40s are the most likely of all respondents to have cut their spending on both discretionary items and basic necessities (42% vs. 29% overall) and reduced their retirement savings since the recession started (25% vs. 20% overall) and the most likely to say they cannot save more because of other financial priorities (69% vs. 55% overall). They are most worried about health care (59% vs. 47% overall), inflation (58%vs. 37% overall), meeting day-to-day expenses (30%vs. 17% overall), and the potential to outlive their money (30% vs.17% overall)."


I know the economy is sucky. I know that most of us are still trying to save up for a house, kids' college, the bathroom remodel, the Christian Louboutains, Whole Foods, or even just the rent, and that we keep putting off retirement planning for just a couple more years. It's magical thinking that someday the money will sort itself out, and that we'll be rescued by an inheritance, a lottery ticket, a better-paying job (which is the premise of Barbara Stanny's book, Prince Charming Isn't Coming: How Women Get Smart About Money). Those things may never happen. And even if they did, how would you know what to do with the money if you got it?


40licious women learn all they can about taking care of themselves and their families in the future. Even if all you can do is put away $20 a month, at least you're on the road to retirement and security.

If you haven't started thinking about this, it's bewildering and overwhelming. (And if you have, please share your stories and tips with us!) Here's a good first step: Have a conversation with someone who is smarter than you about money, and ask, "What's the most important thing I should know about money?" Your answer will lead you to another question, and that to another answer, and so on. And then one day you'll wake up and you'll be really, really comfortable about making financial decisions, and working with people who can help you.

Here are some resources to get you started:

• Wells Fargo's advice for women in their 40s
• Kiplinger personal finance website - good calculators, quizzes and articles
• Barbara Stanny - leading authority on women and money
• Suze Orman's financial resource page

COMMENT: How are you feeling about your retirement fund?

40licious Money: Three Things to Do To Get More Money, Then Save the World

As a writer with a masters’ degree in psychology, Barbara Stanny knows a lot about women and money. And it’s not just because she has written several books. She learned the hard way and was able to teach others. Including me. I had my own head in the sand most of my life about money. I made it, lost it, abused it. I didn't respect money, and I seemed to sabotage myself every time I was poised to make more or keep more.  I knew Stanny and her work in the early '90s because we'd lived in the same small town, and I instantly adored her. But here's something freaky. The very day after I read her "Prince Charming Isn't Coming: How Women Get Smart About Money," I booked my first union commercial, and was able to reset my mind to attract and keep money. Here's what we talked about this week.

Barbara learned the hard way.

The daughter of Richard Block – the “R” in H & R Block – Barbara Stanny was financially secure. She’d married, and let her CPA-lawyer husband take control of the finances. It seemed like a charmed life until her husband left the country, leaving her with a $1 million tax bill and three young children. Naturally, she went to her father to bail her out. He said no. She had to pick herself up and learn about money for the first time in her whole life.


“Setbacks don’t get much bigger than that,” Stanny says. “I’ve interviewed a lot of successful women. It was always the setbacks that led to their forward motion. Every setback comes with gift, every crisis comes with a gift.”


Today, Stanny is a 60-something, happy and successful author who has made it her mission to teach women what she wishes she knew so long ago. Your 40s, she says, is the time to really get cracking on your financial life. The first thing she advises is to wipe out any debt that remains from finding yourself in your 30s, or from the recent economic catastrophe. Even if it means a few years of shaving and cutting expenses.


Their 40s is usually when women get really going on their career, Stanny says. “It’s important that the 40s be a stabilizing time so that you can really find your glory and hit your stride.”


Another important step to take is to really start contributing to your retirement accounts. There’s still plenty of time to let that money grow, untouched by taxes, untouched by you, so that you will have accumulated nice retirement. And if you’re married, it’s really important to partner with your spouse on the financial planning. “Especially if you have children. The best way to help your kids is to model responsible, savvy behavior about money. Make it a family conversation. You should all be talking about money.”


She offered these three steps to getting smart about money, and promises a dramatic improvement in your situation if you follow them for just six months.

1. Every day, read something about money, even if it’s just for a minute. It could be perusing headlines in business section, scanning Money magazine instead of People in the grocery store, or reading one paragraph from a financial book before you go to sleep. “It’s amazing how much you can pick up by osmosis,” Stanny says.

2. Every week, have a conversation about money, preferably with someone who knows more than you. If you’re wondering how to start, just ask, “Can I take you to lunch and pick your brain? It’s amazing how much people want to help you,” Stanny says. “We’ve been doing this for generations about raising babies, making pies … we need to start doing this over kitchen tables and back fences.”

3. Every month, save money. You can set up automatic transfers to a savings account for as little as $5. Stanny recalls a conversation with an editor who wasn’t a high earner, but who saved her change in a bowl every night. In two years, she was able to open an investment account.

But the real reason to make money is not to have money. It’s about the power that comes with financial independence. “We’ve reached a level of wisdom and maturity, when we are ready to make a difference in the world. When enough powerful women come together, if we have the resources, values, to heal this planet, save the world. Taking charge of our money forces us to own our power in a way nothing else does.”

WHAT ARE YOUR TRICKS TO GETTING AND KEEPING MONEY?

BUY BARBARA STANNY'S BOOKS

• Overcoming Underearning(R): A Five-Step Plan to a Richer Life
• Prince Charming Isn't Coming: How Women Get Smart About Money
• Secrets of Six-Figure Women: Surprising Strategies to Up Your Earnings and Change Your Life
• Breaking Through: Getting Past the Stuck Points in Your Life

HELPFUL LINKS

• Find a fee-only financial planner: GarrettPlanningnetwork.com
• National Foundation for Credit Counselors
• Debtors Anonymous