Retirement planning is an important issue for everyone. Unfortunately, many people aren’t as prepared as they should be. According to Employee Benefit Research Institute (EBRI) in Washington, D.C., 45 percent of all American workers over age 55 have less than $25,000 in savings. Women especially don’t save enough for retirement. But in reality, they are the ones who should be most concerned, for a number of reasons.

According to the Bureau of Statistics, women live an average of four years longer than men do: seventy-one percent of women will live past the age of 85. Second, most women over the age of 65 are single, so they have to support themselves. Because of their longer life expectancy, women should save more for retirement than men. But saving and retirement planning seem to be more difficult for women. They still bring home 76 percent less than men, according to EBRI. In fact, from 1983 to 1998, women ages 26 to 59 made 38 percent of what men made, according to the Institute for Women’s Research.

Women also generally spend more time out of the workforce, taking care of children and elderly parents. The shorter length of time spent in the workforce, compounded with the fact that women are more likely to hold jobs that pay lower wages, means fewer retirement benefits. Social Security benefits are based on earnings and total years of employment, and a lower lifetime of earnings translates to lower Social Security benefits. According to the Social Security Administration, the average man received $1,008 a month, while the average woman received $774 in 2003.

Pensions, like Social Security, are based on total years of service and earnings while you work at the company. Again, women are probably going to receive a lower pension benefit. According to the Women’s Institute for Secure Retirement, women are half as likely as men to have pensions, and if they do, their accounts are half the size of men’s.

If any of these situations sound familiar to your clients, they are probably asking themselves, “Will I have enough money?” “What happens when my savings runs out?” and “Am I prepared for the unexpected?” These questions are common for many women. In fact, the EBRI Retirement Conference Survey found that women are less assured than men that their savings will last through retirement.

The good news is you can help your female clients take charge of their finances and build confidence in their retirement plans by implementing the following tips.

Don’t be afraid to invest
When women invest, they are often afraid they will lose what they have. In general, women tend to be more cautious in many areas of life. For example, women often make excellent pilots because they are less likely to take irresponsible risks. But when it comes to investing, women need to take on some level of risk to get the most out of their efforts.

The real risk of retirement is not loss of money, but rather not planning to have enough. Therefore, women need to develop an asset allocation plan that will meet their future needs. An asset allocation plan is designed to suit an individual’s goals and personality. If your client is a conservative investor, help them develop an appropriate plan.

Force them to save more
Most people live for today. They don’t like to think about the future and retirement. So people put off saving until they are in their 40s and realize they want to retire early, but you can’t retire unless you have money saved. Have your female clients use their 401(k) or 403(b) at work to force themselves to save for retirement. They should start small and increase the percentage they add every year. Their goal should be generally 10 percent of their income every year.

And do not forget the IRA. Even if they work from home, they can still add to IRAs. IRAs grow tax-deferred, while Roth IRAs grow tax-free. Talk to your client to see which works best for them.

Planning with spouses
Too often, women let their husbands handle all the investments. They either take the backburner on investment issues or they don’t feel confident handling them. As a result, many women have no clue where their money is. You need to make sure your client knows what they are saving and where it is being invested.

When her husband retires, make sure they fully understand what he is doing with his pension and 401(k). Often, men roll over their accounts with a short-term horizon. During this planning phase, you should always be involved in meetings with your client. When her husband is getting ready to retire, she needs to consider her survivor benefit, life insurance, and life expectancy. Does her husband have the option to choose from a survivor benefit and a single life expectancy on an annuity? If he takes the single life expectancy option and dies a few years later, his pension benefits will cease. She’ll be used to living off his pension with him and be left with no income from his pension at all.

Many husbands take the single life expectancy option because they get a higher income from their pension, but taking a survivor benefit option gives the wife the full amount or portion of his benefit until her death. While many couples take the single life expectancy pension and supplement it with a life insurance policy, this may not be the most beneficial route. A survivor benefit is usually the better way to go.

Also, if your client’s husband is taking a 401(k) or pension rollover, she needs to know where the money is going. Women who are going through a divorce also need to work with lawyers who have experience in evaluating pensions and tax consequences.

Planning for the unexpected
Many people dip into their retirement savings when something unexpected happens. This can result in a 10 percent penalty for early withdrawal if you’re younger than age 59 1/2, plus state and federal income taxes. So make sure your client puts put three to six months’ income aside in case of the unexpected, such as a job loss, divorce, or death of a spouse.

Securing the future
While retirement requires major planning for everyone, women need to be most concerned about their finances. A longer life expectancy, less time in the workforce, and lower wages make it more difficult for women to save enough money to last throughout retirement. However, by following prudent measures to help your clients take charge of their finances, you can help them secure their future and live their retirement years with confidence.

Doug Charney is a financial advisor with the Harrisburg office of Wachovia Securities. For more information, call 888-529-2973.