Women need to plan for a long retirement

With all of the financial issues facing people today, retirement planning sometimes gets put on the back burner. This could lead to problems down the road as we are living longer, requiring more money in retirement. While saving for retirement should be in the forefront for everyone, it is especially vital for women as they, on average, outlive men. According to the World Economic Forum, women outlive men by an average of five to six years.

I can't stress enough how important it is for women to start saving as early as possible but unfortunately, many women seem to be failing to do this. A recent study by Transamerica found that only 62 percent of women said they were saving for retirement, with just 15 percent saving enough and 22 percent barely saving at all. It doesn't matter how much you set aside at first, just put something aside in an investable account so your money can accumulate while you are busy caring for the rest of the world.

Obstacles facing women

Women face many obstacles to saving for retirement such as getting paid less than men - on average, 79 cents on the dollar. This disparity can add up to over $500,000 in retirement savings so women need some serious planning to ensure that they don't outlive their money.

Additionally, women are often the caregivers of the family, moving in and out of the workforce to raise children and/or care for sick or older relatives. Stopping work, for even a short amount of time, can reduce retirement savings by lessening any pension they may qualify for or contributing less to Social Security and 401(k) plans. This could mean that they will receive less retirement money than men.

What can women do?

Taking a proactive role in planning for their financial future can be the key for many women. It takes conscientious saving and considerable planning efforts to work toward securing a comfortable retirement. Understanding what to do at various times in life is vital to building a solid financial future. Women who are married, widowed, single or divorced need to take control of their retirement destiny and put the plans in place so they can have a reliable income source as they age.

Start by asking yourself some tough questions:

1. Do you understand the finances in your household?

2. Do you know where your money is being invested?

3. Do you know how much you need to save for retirement?

4. Do you know how much you are saving?

5. Is your retirement savings too conservative? Aggressive?

6. Have you considered health care and the related costs for the future?

I've helped many women plan for their retirement and I've found that until they know the answers to these questions, they will not feel secure in their future. Take control and understand that your future is in your hands. If you are married, get involved in the finances and know where your money is going. Unfortunately, a third of widows lose their spouses before age 60, and half become so before age 65, according to a study by the Women's Institute for a Secure Retirement. If you are widowed, single or divorced then you have probably already taken control of your finances but are you really planning or planning correctly and proactively for retirement?

Regardless of your situation, educate yourself - take continuing education courses, ask questions; no matter how you do it, take the time to learn. Talk with a professional and map out a plan that you understand and are comfortable with. It can only benefit you in the long run but the time to start is now. Women need to save as much as possible, starting as early as possible. There are more demands on women than ever before so the excuses to put this off are endless but, trust me, you do not want to run out of money and end up as the proverbial bag lady in retirement.

• Nancy Coutu is co-founder of Money Managers Financial Group, (MMFG) an Oak Brook-based independent financial planning firm. While Nancy's firm does cater to retirement planning for couples, she also works specifically with single women who simply connect better with a female financial planner.