The retirement savings crisis in America is widely known by financial professionals, but is only starting to trickle into the consciousness of the public which it will affect most.

Within this issue is the alarming reality that women, even wealthier women, on average, are saving less than men for a retirement that will start sooner and last longer. External political, economic and financial factors, as well as life situations, shape the attitudes and behaviors of wealthy women. The respondents to Spectrem’s research on wealthy women were focused on the long-term security issues of retirement in an uncertain environment.

The Mass Affluent women ($100K - $1MM of net worth, not including their primary residence), in general, are concerned about retirement and planning for a comfortable, worry-free retirement. The Mass Affluent tend to be older, with an average age of 59 with two-thirds of the group being age 55 and older. Indeed, roughly half are age 55-64, what many consider pre-retirement years. Of these, 85% plan to retire within the next ten years, with many planning to retire within the next five years.

The Mass Affluent are not living off of their investments, generally. They are working people, as evidenced by the fact that among those Mass Affluent working full-time, only 9% of current total wealth is derived from investment income. Even among those who are fully retired, only 29% of total wealth is generated from investment returns.

Women Are Growing Aware of Crisis

Women are aware of the crisis they are facing, at least on an individual level. In a Spectrem January 2005 survey of retirement plan participants, when answered the question, “I fully expect to have sufficient income to live comfortably in my retirement” a robust 60% of respondents agreed with the statement. However, that number has steadily dropped from 55% in June of 2006, to 42% in January of this year, bottoming out at 33% in June 2007 and rising slightly to 38% in June 2008. Mirroring that sentiment, in January of 2006 only 32% of women Spectrem Group surveyed agreed with the statement, “At the present time, my household is not saving enough to meet our financial goals”, as opposed to only 29% of men who agreed. That number has steadily risen in a year and a half, with 44% of women agreeing with that statement, in June of 2007. It has risen back to 51% in the last few months.

Women, even Mass Affluent women, need to be saving as much as reasonable possible from their income, as early as possible. They should to plan for a long life and, if married, they ought to plan for at least 6 years alone, without spousal support if they are the same age as their spouse and more if they are younger. Married women must not feel exempt from this crisis, despite the feeling of security a spouse’s retirement plan may give them. Couples need plan for every eventuality, especially the unpleasant ones: divorce, death, or a main bread-winner becoming incapacitated in some way, and unable to work and save. Retirement income vehicles like annuities and laddered portfolios should be set up to accommodate these eventualities and education needs to be in place to enlighten plan participants.

The ugly truth is that a comfortable retirement doesn’t happen by chance or accident. A comfortable retirement requires planning and action.

Tough Planning to Do

All women, including wealthy women, need to be educated, informed, and to develop a plan that realistically meets their retirement needs and addresses where they are in life, now. It’s easy for women, especially single, widowed, or divorced women, to get distracted from the goal of a comfortable retirement. There are children and grandchildren to take care of, aging parents to tend to, bills to pay, and a plethora of other concerns pressing on them and their pocketbooks.

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