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5 Steps To Help Women Save More For Retirement

According to the latest statistics, women have made great strides in saving for retirement but still lag far behind their male counterparts. A new report by the National Institute on Retirement finds that men received $17,856 in median retirement income from pensions in 2010, compared to $12,000 that women got—33% less than men. The gender gap also extends to retirement plans such as 401(k)s. In 2014, women had 34% less than men in these accounts, with a median of $36,875 for men and $24,446 for women.

To compound the problem, women have longer life expectancies than men; this means they need more – not less – to live on during retirement. The Social Security Administration says women reaching age 65 today can expect to live, on average, until age 86.6, as opposed to age 84.3 for men.

But taking steps now could help women overcome these hurdles. Here are five to consider:

1. Map out a plan. Married women, in particular, may tend to leave retirement planning to the men in their lives, especially if they relied on their husbands as the primary breadwinner during child-raising years. But it's important for women to participate in their family's financial planning, so that they can help formulate goals and what it will take to reach them. For women on their own it can be all the more crucial to commit a plan to writing and do their best to stick to it.

For instance, project where you expect to be in 10, 15, or 20 years, and what your living situation will be then. Will you continue to live in a high-rent district in retirement? What is your health status? Do you expect to be on your own or with a spouse? The answers can shape your goals.

Finally, when you're finished, don't just stick the plan in a drawer and forget about it. Review it periodically and, when warranted, update it to reflect your changing needs.

2. Create a budget. If you haven't done so already, develop a budget for yourself as well as for your household. In particular, focus on ways you can save more and spend less. For instance, if you participate in an employer plan for flexible spending accounts, you can save on taxes while setting aside funds for health care and dependent care. Also, if you're a homeowner, you might prepay principal on your mortgage, a strategy that can reduce the amount of interest you pay and shorten the time it takes to retire a mortgage.

On the spending side, can you forego some luxuries? Can you reduce annual expenditures for your wardrobe and entertainment? Such cutbacks may free up more funds for retirement.

3. Don't ignore the risks. Even if you're fit as a fiddle right now, there is no guarantee you won't face serious health issues in retirement. Act now to ensure that you'll be protected from any catastrophe that could soak up your life's savings. For instance, you should be able to rely on adequate health insurance coverage through an employer or other resources. When you reach age 65, the qualifying age for Medicare, you probably will need to buy supplemental coverage to reduce your out-of-pocket costs.

Women, in particular, also may want to consider buying long-term care insurance to help cover the costs of nursing home care they may need one day. According to American Seniors Communities, there are seven times as many women as men in assisted care facilities.

4. Salt away more in tax-favored accounts. Don't pass up the opportunity to participate in a 401(k) or another kind of retirement plan at work. The tax law permits you to defer salary within generous limits, plus "catch-up contributions" are allowed when you're age 50 or older. Also be sure to contribute enough to qualify for the maximum matching contributions from your company.

Money you put in traditional or Roth IRAs can complement employer-based retirement plans. A Roth IRA, which doesn't let you deduct contributions but does offer tax-free distributions during retirement, could be particularly helpful, especially if you expect to pay a higher tax rate in retirement than you did while working. "Spousal" IRAs can benefit nonworking wives.

5. Rely on a financial advisor. Having a retirement expert help guide your decisions can be just as helpful for women as it is for men. From working with you to develop an investment plan to helping you decide when to begin receiving Social Security benefits and how to manage required distributions from your retirement accounts, an advisor can be an essential partner in planning the kind of financial future you want.

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This article was written by a professional financial journalist for The Dover Group and is not intended as legal or investment advice.

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