Tips for Starting and Staying on the Road to Retirement Wi$e -Up Teleconference September 30, 2009 Cindy Hounsell , J

1. Tips for Starting and Staying on the Road to Retirement Wi$e-Up Teleconference September 30, 2009Cindy Hounsell, J.D.www.wiserwomen.org

2. Why Women?? • At age 65+, there are 6.2 million more women than men • At 75+, there are 4 million more women than men • At 85+, there are 1.8 million more women than men: 71% of the 85 and older population • The age 85+ numbers are expected to triple over the next three decades • This is the group likely to end up living in poverty

3. Why Women Need More Retirement Income? • Women live longer than men. • Women earn less than men. • Women are likely to be single and not remarry. • Women are more likely to need long-term institutional care. • Women are less likely to afford not to work.

4. Longevity Risks • Inflation • Outliving Assets • Death of a spouse • Unexpected healthcare needs and costs • Loss of ability to live independently – long term care needs • Many older women end up in poverty for the first time in their lives

5. Older Women & Poverty • Older women are twice as likely as older men to be poor. • Women are still more likely to depend on their husband’s earnings for retirement. • Nearly 20% of single, older women in the U.S. are poor.

6. 7 Life-Defining Decisions Project • WISER and the Actuarial Foundation launched the 7 Life-Defining Decisions Project. • Purpose is to help people pay attention to decisions you make throughout your lifetime that will have a big impact on your future. • The key is to learn the basics and make a plan. • Try to keep it simple – you can begin saving small amounts and try not to get discouraged. • Learn the rules of your work retirement plans.

7. Key Decision Points: • Choosing a career • Changing jobs • Getting married and having children • Buying a home • Starting to save and invest • Figuring out how much you will need. • Having a lifetime financial plan can provide a smoother journey.

8. Important Life Decisions for Moving Toward a Safer Financial Future • Understand the challenges women will have planning for longevity risks. Make a plan to overcome them. • Develop and stick with a financial plan -- early. • As you make decisions think about your long-term goals. • Stay involved with financial decisions if you marry or if you live with a partner. • Avoid debt and keep on top of your credit records. • Keep good records.

9. Learn about sources of retirement income. • Workers misunderstand what their primary sources of income will be in retirement. • Social Security is the most important source of income for most women. • Other sources include retirement plans.

10. Retirement Needs and Sources of Income • Basic Needs of Retirees 1. Income 2. Medical Coverage & Prescription Drugs 3. Long-term Care • Sources of Retirement Income: 3-Legged Stool 1. Social Security • 2. Pensions • 3. Savings & Investments

11. Learn early about your retirement savings plan. • Workers are now responsible for managing their investments. • Most workers lack basic financial knowledge. • You will need to become educated about work benefits.

12. SAVE MORE • Most people do not think about financial matters long-term – they ignore the long-term and think it will never come. or • They think about it and vastly underestimate how much they will need. • Use the calculator at www.wiser women.org

13. Savings Basics • Make a plan to save a certain amount each month. The sooner you start the better! • Investing early pays off because the interest compounds for more years. • Participate in your retirement plan at work. If your employer will match your 401(k) contribution, take advantage of it.

14. Leaving a job • When leaving a job — what will happen to your retirement plan? • Defined benefit plans — usually vest in 5 years. The longer you stay, the more valuable the benefit • Defined contribution plans — usually vest in 3-6 years/ leave your money in the plan or have it automatically rolled over to another plan or an IRA • Think about keeping your skills and contacts up to date so you can re-enter the workforce

15. Accept that you and your parents will likely live longer than you expect. • Individuals are expected to manage their own retirement funds. • Many will plan for the average life expectancy, not realizing that this means half of the people will live longer. • The big risk for women is that they will outlive savings.

16. Caring for Parents • Caring for an elderly parent can complicate financial plans. • Talk to your parents ahead of time and find out their wishes and plans. • Ask how they have prepared their finances for the future. • Talk to your siblings and see if they will help your parents with care. • Find out what insurance coverage your parents might have • If you need help, contact Eldercare Locator or your local Area Agency on Aging. • Eldercare Locator: www.eldercare.gov or 1-800-677-1116.

17. Marriage Decisions • Your plan for retirement needs to work for you as a couple and for each of you separately. • Decisions made at time of marriage, during the marriage and at its end affect your security. • Marriage — most assets that you or your spouse acquire during the marriage will belong to both of you. • Stay aware of your spouse’s debts — they may become yours some day. • When others are depending on you for support, consider life, disability and health insurance. • Both spouses should share responsibility for major financial decisions. • Women should not be so quick to give up their survivor benefits.

18. Divorce and Retirement • Divorce can change finances dramatically. To claim a share of an ex-spouse’s retirement benefits, you must obtain a Qualified Domestic Relations Order at the time of your divorce. • Pensions can be the most valuable asset to divide, but are frequently overlooked • Couples living together, but not legally married, do not receive legal protections to most benefits. • Social Security provides spousal benefits to individuals in common law marriages if recognized under state law

19. Protecting Income Financial abuse: • Misuse of ATM, credit cards, joint accounts • Mismanagement of income or assets • Cashing checks without authorization • Theft of pension and benefit checks or Identity theft – jury duty scam

20. Look for good advice. • Most people say they want the help of a “qualified professional.” • Actually, most people ask friends and family for advice.

21. Financial Planners • Tips for finding a financial planner: • Get recommendations and references. • Make a list and ask a lot of questions. • Check out their professional training, credentials, registrations and legal standing. • Find out how you will pay for services and what services the planner will provide.

22. Financial Planners • Types of Planners • Fee-only - charge a flat fee or an hourly fee, and generally do not receive commissions. • Commission-based - earn commissions on the investments they sell.

23. Financial Planners For More Information, Contact: • National Association of Personal Financial Advisors 888-333-6659 • Institute of Certified Financial Planners 888-237-6275

24. For More Information Go To WISER’s Web Site: www.wiserwomen.org