Help mom plan for financial security

As Mother's Day approaches, it's worth noting that most women still face significantly more hurdles to achieving financial security than do men, especially at retirement. A few statistics say it all:

• Nearly two-thirds of working women earn less than $30,000 a year.
• About half have low-paying jobs with no pension or 401(k) plan.
• Women earn on average 77 cents for every dollar men earn.
• On average, women spend 13 fewer years in the workforce because they'll more likely take time off to raise children, thereby lowering potential pension and Social Security benefits.
• Women live longer, so their retirement savings must stretch further.

Many moms are so busy balancing family responsibilities that their own financial planning falls by the wayside. Here are a few tips to help your mom calculate her retirement income and alter her savings habits, if necessary, while there's still time:

Know how much you'll need. Most financial planners suggest you'll need 70 to 90 percent of pre-retirement income to maintain your current lifestyle after retirement. However, because women often live longer and earn less, they may actually need more. Think of your retirement income as a three-legged stool comprised of Social Security, employer-provided benefits and individual savings. If one "leg" falls short, the "stool" will likely wobble.

Social Security benefits. You should receive an annual statement showing earnings on which you've paid Social Security taxes and your estimated retirement benefits. Note that this statement doesn't include benefits for which you may qualify from another person's account (such as your spouse). If you haven't received your statement or have questions, call 1-800-772-1213 or go to www.socialsecurity.gov.

Since Social Security only replaces about 40 percent of the average worker's wages, the other two components are equally important:

Employer plans. If you're eligible for a pension, you should receive an annual statement estimating your retirement benefit. Likewise, many 401(k) plan administrators provide online calculators that can help you estimate how much you will accumulate under various contribution and investment scenarios. If yours doesn't, visit www.bankrate.com/calculators and look under Retirement Calculators.

Individual savings. For many women this is the most critical - and most critically under-funded - component of their retirement savings. When you earn less, it's even harder to save. If you don't have access to a 401(k) or similar plan through work, you can still reap tax advantages by saving through an Individual Retirement Account (IRA). You can contribute up to $5,000 a year (up to $6,000 if you're over 50) to a regular or Roth IRA. To see how those contributions can grow over time, go to the Bankrate.com link above and click "Full List" for IRA calculators.

Women's Saving Initiative. In conjunction with Heinz Family Philanthropies and The Women's Institute for a Secure Retirement (WISER), Visa Inc. developed the Women's Saving Initiative (www.practicalmoneyskills.com/womensave).

Among other features, this no-cost site includes a comprehensive book called "What Women Need to Know About Retirement," authored by experts in the field. The free book makes a nice gift for mom and comes in a written version that's easily printed out along with an audio version that can be played online, burned to a CD or downloaded to an iPod.

A more expensive gift option, but one that could get her retirement savings on track and change her life, is to take her to see a financial planner. If you don't know one, www.plannersearch.org is a good place to start your search.