For 25-year-old Dedre Ashley, the importance of retirement planning already has hit home.
Ashley's father had retired from the Air Force after 25 years and searched for more than a year for a job to supplement his pension, she said. He found one but was later downsized. Then, another job and another downsizing.
"He's now 63, and still having to work," said Ashley, a health educator who is pursuing a master's degree in public health at the University of Massachusetts. She's determined to avoid the same fate.
"I would like to retire when I'm 55 or 60 and work if I want to vs. having to work," said Ashley, who invests in a mutual fund and a Roth Individual Retirement Account.
It's that goal plus wanting to learn about more aggressive investments that brought Ashley yesterday to the retirement planning seminar at the Feminist Expo 2000, which is being held in Baltimore this weekend. Financial experts there listed a series of obstacles to women's retirement planning:
Women on average outlive men by six years, so their nest egg needs to last longer.
They make less than men, averaging 73 cents for every dollar a man earns.
As primary caregivers, women on average spend 14 years outside the work force taking care of children and elderly parents, thereby reducing their savings and pensions.
Wom en often lean toward more conservative investments, not realizing that leaves them at greater risk of inflation eroding their purchasing power.
Women can improve their retirement outlook by making smart decisions at work, said Martha Priddy Patterson, director of employee benefits policy analysis at Deloitte & Touche and author of the "Working Women's Guide to Retirement Planning."
When choosing jobs, for instance, weigh the total compensation package, including retirement and health care benefits, Patterson said. "Don't just look at what you take home in a paycheck."
A $25,000-a-year job with no benefits may turn out to be just as lucrative, or even less so, than a $20,000 job with a retirement plan and health care benefits, she said.
Participate in an employer's retirement plan if offered and make sure you understand the plan's rules, Patterson said.
Some employers may require that you work a number of years, usually five, before you're vested in the plan, or able to keep whatever contributions an employer has made on your behalf, Patterson said. (Women on average stay on the job 4.7 years.) If workers aren't aware of the plan's rules, they may quit their job just short of being vested and give up thousands of dollars, she said.
When you switch jobs, don't spend the dollars you've been saving up in your 401(k) or other retirement savings plan, Patterson said. It's best to keep the money in the plan, roll it over into your new employer's plan or into an IRA to avoid hefty taxes and penalties, she advised.
Because women tend to make less than men and their Social Security benefits are smaller, they must be more aggressive about saving and investing, experts said. Gail Buckner, a senior vice president at Putnam Investments, recommended that women save 10 percent of their pre-tax income annually.
Money for long-term goals, such as retirement, should not be put in investments that guarantee a low, fixed return, Buckner warned. "The biggest threat to your financial security is inflation," she said.
Funds not needed for five years or more should be invested in the stock market, where the risk is greater but so are the long-term returns, Buckner said.
An easy way to invest is by dollar-cost-averaging, or putting a fixed amount of money at regular intervals into stocks or mutual funds, she said. That way you won't have to worry about when is the best time to make a purchase, she said.