How Important is 401k for Women?

There are many reasons why women need 401k more than men. It has been found that on average women live longer than men. Since they earn less, the Social Security checks they receive are also of smaller amount. Studies also reveal that women tend to switch jobs more frequently than ever. And above all the priorities of women are different from that of men. For instance, men focus more on saving for retirement. This is in sharp contrast to women that try to focus more on funding for kid’s education etc.  

So, women need to think about themselves and focus on their retirement benefits. This explains why 401k (tax deferred plans) can be of immense help to women. If you are planning to invest in 401k, the amount you put into it and the interest it earns belongs to you irrespective of the number of jobs you switch. This is because if you are changing jobs, you can always roll your existing 401k into 401k which is new or change it into IRA so that the tax deferred status is retained. However, it is important that you check it out with your current employer prior to rolling it into new 401k or IRA. This is because there may be a matching contribution offered by your employer.  

Statistics indicate that approximately 70% of the women are saving for their retirement period as compared to 71% men. This data has been furnished by the 1999 Women’s Retirement Confidence Survey.  

How will you proceed if you are planning to secure your future financially?

• Make use of a retirement calculator that can help you to find out how much you will require for retirement that will be enough to allow you to live comfortably. It is important to take into account life expectancy when you calculate the same.  

• Find out the kind of retirement benefit that is being offered by your employer. Make sure you find out the employer match offered.  

• Get extensive information about the new retirement plan when you are switching jobs.