The New York Times, October 23rd, 2007
VICKIE ELISA was ready to jump at the offer of a consulting position —
and a $40,000 raise — in Washington six years ago. But a benefits
expert whom she worked with at the DeKalb County Board of Health in
Atlanta stopped her short. The new job had no pension plan, the expert
pointed out, whereas Ms. Elisa would be eligible for one from the State
of Georgia that would pay as much as 90 percent of her salary after she
retired.
“I never ran the numbers that way,” said Ms. Elisa, now 49. “I always said, ‘I don’t need to think about this till I’m 60.’ ”
Since
turning down the consulting offer, Ms. Elisa has done a lot more
thinking about retirement. Instead of retiring in three years at 52,
she is planning to work until she is 57 or even 61, which would
increase her pension by at least 21 percent. She is also planning to
put future 401(k) contributions into more aggressive stocks.
More
women are doing such retirement financial analysis, for good reason.
They can’t afford to retire. Whether they have a traditional pension or
a 401(k) plan, women consistently enter retirement with about half as
much money as men do.
The explanations have been known for
years. Women generally earn only about 80 percent of what men earn.
That hurts because the formula for a traditional pension is based on
income, while the lower earnings make it harder for women to put money
aside in a 401(k).
Yet those skimpier 401(k)’s must stretch over a longer time frame, as women outlive men by about five years, on average.
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