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Learn About Financial Planning

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6. Strengthening Your Fitness Plan

Saving For Retirement

Once you've reduced unnecessary debt and created a workable spending plan that frees up money, you're ready to begin saving toward retirement. You may do this through a company retirement plan or on your own - options that are covered in more detail later in this booklet. First, however, let's look at a few of the places where you might put your money for retirement.

Savings accounts, money market mutual funds, certificates of deposit, and U.S. Treasury bills. These are sometimes referred to as cash or cash equivalents because you can get to them quickly and there's little risk of losing the money you put in.
Domestic bonds. You loan money to a U.S. company or a government body in return for its promise to pay back what you loaned, with interest.
Domestic stocks. You own part of a U.S. company.
Mutual funds. Instead of investing directly in stocks, bonds, or real estate, for example, you can use mutual funds. These pool your money with money of other shareholders and invest it for you. A stock mutual fund, for example, would invest in stocks on behalf of all the fund's shareholders. This makes it easier to invest and to diversify your money.

Facts Women Should Know About Preparing For Retirement

Women face challenges that often make it more difficult for them than men to adequately save for retirement. In light of these challenges, women need to pay special attention to making the most of their money.

Women tend to earn less than men and work fewer years.
Women tend to change jobs or work part time more often, and they interrupt their careers to raise children. Consequently, they are less likely to qualify for company-sponsored retirement plans or receive the full benefits of those plans.
On average, women live 5 to 7 years longer than men, and thus need to build a larger retirement nest egg for themselves.
Some studies indicate women tend to invest less aggressively than men.
Women are less likely to be financially informed than men.
Women tend to lose more income than men following a divorce.
Women are twice as likely as men during retirement to receive income below the poverty level.

For more information, call the Employee Benefits Security Administration at 1-866-444-EBSA (3272) and ask for the booklets Women and Retirement Savings, Taking the Mystery Out of Retirement Planning, and QDROs: The Division of Pensions through Qualified Domestic Relations Orders (for example, divorce orders). Also call the Social Security Administration at (800) 772-1213 for their booklet Social Security: What Every Woman Should Know, or visit the agency's Web site at www.socialsecurity.gov.

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