Retirement Savings Motivation
While the information provided in this article doesn’t necessarily help you as an accountant or bookkeeper, I thought it would be valuable for you to know. Please let me know if you would like to have more articles of this type in the future.
Results from the 1998 Women’s Retirement Confidence Survey are both encouraging and discouraging. Major findings of the survey, which was conducted by the American Savings Education Council (ASEC), show that…
* Fifty-nine percent of women have saved for retirement, while 41 percent have not.
* Twenty percent of women are very confident about their retirement income prospects, while 40 percent are somewhat confident, and 31 percent are not confident at all.
* Among those women who are saving for retirement, only 30 percent are confident that they are investing their savings wisely.
* Sixty percent of women say that they have not figured out how much they need to save for retirement.
Why Women Don’t Save
While women cite many reasons for not saving for retirement, by far the most common reason is too many current financial responsibilities (67 percent). Other major reasons for not saving include uncertain economic events (30 percent), lack of retirement savings plan at work (26 percent), expectation of a pension (24 percent), lots of time remaining until retirement (23 percent), have not thought about it (21 percent), and retirement will work itself out when it comes (21 percent).
A smaller but significant number of women indicate that they have not saved for retirement because they can’t find investment information that is easy to understand(19 percent), they don’t know where to start (19 percent), or they are not comfortable dealing with banks or other financial institutions (13 percent).
The ASEC points out that with interest compounding, a 25-year-old woman who begins saving $20 per week will accumulate a $132,000 nest egg over 35 years. For a woman aged 65, $132,000 could purchase an annuity for life of $870 per month or $10,440 per year.
The survey points up the need for more and better education for women about planning and saving for retirement. While many are saving, many still are not. What’s more, even those women who are saving need help–most have no idea how much they need to save, and many are not doing a good job of investing their savings.
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