Why women fall behind in retirement

Whether women are paid less than men because of poor salary negotiating, career choices or institutional biases, the result is that not only do they have less to save but their Social Security payout is less. They put in fewer years at work and often lose out on years of paying into a pension or defined-contribution plan.

On top of everything else, most women have children during vital career-development years.

"If you drop out of the work force to take care of children, that is probably going to be a time in your late 20s or early to mid-30s, when your male colleagues who stay in the work force are getting promotions and climbing the ladder," says Ginita Wall, a certified public accountant, certified financial planner and co-founder of the Women's Institute for Financial Education, a nonprofit organization.

For women who choose to take time out to raise children, losing those working years means that they return to the work force at the same level they were at years before, maybe even with obsolete skills, falling further behind in their careers and savings.

"That means you'll be earning less and will have lost crucial years that you could have been adding to your 401k and earning years of service that would get you a higher return," Wall says.

Women are stuck with more chores

Women who continue to work while caring for children often find themselves in the unenviable position of being the baby sitter, housecleaner, cook and laundress in addition to working their full-time jobs. And that leaves less time to contemplate investments or retirement planning.

Astre had a couple as clients who had differing levels of involvement in their workplace retirement plans. The husband was very involved in his, while the wife had no idea where her contributions were going.

"In my office, she turned to her husband and said: 'You get home from work, you sit on the couch, open a beer, and that's the end of your day. I've got to make dinner, do the laundry, take care of the kids and go shopping,'" Astre says.

"And it's true. Meanwhile, I felt guilty. That's what I do at home."

Women are short on savings

Even though women today have more opportunities to guide their own financial ships, not all are taking the helm. Research and anecdotal reports from financial planners report that many women, whether single or married, are not adequately preparing for retirement.

A 2008 Retirement Security Project study, "Retirement Security for Women: Progress to Date and Policies for Tomorrow," compared the retirement accounts of men and women and found that women's accounts reflect about half or less of the balance of men's accounts, on average.

Women are ambivalent about finances

In her experience, certified financial planner Nancy Gardner has found that a significant portion of married women of all ages cede control of their financial futures to their husbands.

"They find finances boring, so they just let their husbands handle it," she says.

• Talk about it: Discuss financial issues with other women

Single women of all of ages tend to avoid the topic altogether, Gardner says.

"They think that they will never have the money to retire, so they don't want to think about it," she says. "I have actually had people tell me when I ask what their retirement plan is, and they tell me in all seriousness, 'Marry well.' And that is all age categories. It is really sad."

The antidote to the gender-specific retirement conundrum comes down to instilling a financial education and, apparently, a healthy dose of self-sufficiency in women.

Women are facing better times

Younger women should have it easier than the generation that spawned the baby boomers. More women are in the work force now than ever before.

No matter what their age, women have to take responsibility and get involved. Ideally, everyone should start early, Rappaport says.

Even stay-at-home moms have the chance to save money in a qualified plan. Their working husbands can contribute up to $5,000 in a spousal individual retirement account in 2009 ($6,000 if the nonworking spouse is 50 or older).

Women are relationship-oriented

Women who are disinclined to hit the books for some financial education should visit a financial adviser for advice. Fee-only certified financial planners can offer objective suggestions.

"Women are more process-oriented. Women are more relationship-oriented," PNC's Silverman says. "They will often select a financial adviser but take a long time to find the right one, because trust is a critical component."

Advisers can help with goal setting and determining how much you should be saving.

In Bankrate's retirement survey, 41% of female respondents said they had not figured out how much money they would need for retirement, compared with 33% of men.

Conversely, more women than men had gone to financial advisers to find out how much money they should save -- 32% versus 22%. Poll respondents who had used a financial adviser expressed much more confidence about having enough money to retire in comfort.

Video: How to pick a financial adviser

The bottom line: If more women took responsibility for their retirement planning, their golden years might seem a little bit brighter.

This story was reported by Sheyna Steiner for Bankrate.com.

Updated Sept. 29, 2009

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