The Transamerica Center for Retirement Studies, a non-profit private foundation indicated in its "11th Annual Transamerica Retirement 2010 Survey" that women's retirement confidence has been shaken by the recession, and fewer women than men are optimistic about the economy improving or their own personal financial situations getting better. The results in the survey said that many women (29%) expect to work longer and retire at an older age and that many are saving less (45%) and spending less (61%) since the recession began. These results are a bit conflicting but the explanation; the survey says "may be partly explained by the number of women (60%) who cite either 'just getting by' or 'paying off debt' as their greatest financial priority." Only 6% of women are "very confident" in their ability to fully retire with a comfortable lifestyle.

Savings and Retirement
Women are not saving enough and since on average they tend to live longer than men, women should theoretically start saving sooner in order to build a heftier retirement nest egg. According to Stacy Francis, CFP®, CDFA™ President of Francis Financial, women's long-term financial needs are different from men's because they earn 25% less and outlive men by five to seven years. Women also have less in their 401(k)s because we spend 11.5 years out of the workforce, versus 16 months for men.

"If you think that marrying your knight in shining armor will solve your financial problems, think again. 50% of marriages end in divorce. Even if you married the 'right' man, three of four married women become widows by age 75. Even more shocking, the average age of widowhood is 56," she adds.

So what is the best way for young women to start building a strong retirement fund?

Become Financially Literate and Increase Your Financial Awareness
Francis advises women to read books, watch financial TV, go to seminars, ask questions and take stock of your present savings and expenses. Start automatically depositing a portion of your paycheck into savings to be used for investing. I automatically put away at least $100 per month in a separate savings account.

One of the best ways to prepare for your retirement is to just do it. Set aside any excuses about not opening a retirement account. Max out your contributions to a 401(k) employer-sponsored plans. Francis suggests you open a Keogh, single-employee SEP or Solo 401(k), if you are self-employed. Whether self-employed or an employee, contribute up to $5,000 each year to an individual retirement account (IRA). If you have a Roth IRA, this year you can contribute up to $5,000 in after tax dollars or up to $6,000 if you are 50 years of age or older, these are called "catch up" contributions.

Find New Ways to Invest
Diversify your investments. Invest in a sensible mix of stocks, bonds and cash. Make sure you go to a trusted fee-only financial advisor for detailed advice, adds Francis. The last thing you need is someone who is trying to push financial products for a sale, and not working towards your best interest.

The Bottom Line
Many investors get burned because they make an investment and forget about it says Francis. Be sure to rebalance your portfolio every year. If you've invested in real estate, make improvements. She says if you've invested in a franchise, maybe it's time to think about cashing out, and then invest that money in something else. Also, be aware of any fees that creep up. Uncared for accounts can be vampire money eaters. If you don't account for fees, they can eat away at any account gains.

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