It always surprises me that so many women I speak with tell me they aren’t putting enough in their employer plans to get the savings match or that they left their jobs before their retirement benefits vested. I admit I’ve done the scuffle at certain times in my life — and I regret it.
But saving for retirement is essential and women need to do a better job. According to a U.S. Government Accountability Office report in 2012, women who participate in 401(k) plans contribute about 30 percent less than men.
A Woman On a Mission
That’s why I’m enamored of a woman named Annette Grabow, who is on a mission to get the women at her company to save more for retirement. It seems to be working.
“To motivate women to save more for their retirement years, you need to get them engaged face-to-face and keep pounding at them time after time after time,” said Grabow, manager of retirement benefits for M. A. Mortenson Co., a family-owned international construction firm based in Minneapolis, Minn. She spoke about her initiative at the recent Women’s Institute for a Secure Retirement (WISER) 2013 Women’s Retirement Symposium in Washington, D.C.
What got Grabow going was when she discovered two years ago that women made up most of the firm’s 1,400 employees who were eligible to contribute to its 401(k) plan, but either weren’t participating or weren’t putting in enough to get Mortenson’s match.
Money Workshops for Women Employees
So she decided the time had come to launch a pilot education program she calls “Money Madness.” Small groups of the firm’s female employees were invited to a series of hour-long workshops dealing with the retirement planning challenges women face and strategies to take them on.
They were handed iPads so they could seek online resources for financial education and retirement planning. And they were given access to a specially created Dropbox computer storage system allowing them to share articles and other information with each other after the sessions ended.
Grabow bedecked the room with posters highlighting the grim retirement statistics for women and asked attendees, mostly engineers, to take answer anonymous surveys about their finances.
The workshops’ goals:
- To raise awareness that women need to save more and why
- To motivate women to access resources that can help them learn about investing and make wise, informed choices
- To show women how to stay on top of their financial affairs
- To inspire women to “capture the cash” now so they can maintain their standard of living in retirement and invest more once they’ve retired
- And to connect with other women throughout the year for suggestions, resources and ideas that could help them stay focused on their goals
Reactions Differed by Age
Grabow found the younger employees initially didn’t think her dire statistics applied to them, maintaining that only women their mothers’ age would run into financial difficulties in retirement. “It was hard to convince them of the need to save,” Grabow said. “They didn’t believe they were ever going to be out of the workforce or would get paid less than men over the course of their careers.”
The women over 50, on the other hand, laughed as they recognized themselves and others their age in Grabow’s posters. “They shared stories that proved the statistics, and they listened,” said Grabow, “but they weren’t engaged in conversations about coming up with solutions.”
For the older Mortenson women, Grabow said, the overall response was, “I am doing the best I can. I just hope it’s enough.” They also wished they had prepared for retirement better. “I think they were a little envious of the younger women and the resources they have available,” Grabow says.
Slashing Spending to Save More
Grabow was initially afraid the workshop women would think her focus on slashing spending in order to save more for retirement was “too fuddy-duddy.”
But, she said, “they got into this like you would not believe. Women, I think, universally know how to find a deal. They sort of went nuts and shared all kinds of ideas about how to save money from vacationing off-season, eating out less, only eating out with special deals from Groupon and buying clothes in their home state of Minnesota, where there’s no sales tax.”
The Workshops are Working
When Grabow’s workshop attendees later responded to a follow-up survey, 71 percent said they learned ways to save more and would use those newfound savings to increase the amount they invest for retirement. Similarly, 71 percent said they felt “very empowered” with the information and resources they received.
“We’ll see,” said Grabow, who in January will check if the women truly increased their retirement savings at work. “Trust me, we will keep on pounding the message over and over.”
3 Retirement-Saving Lessons From This Program
I like Grabow’s spirited approach and think other women should follow three lessons from her program:
1. Ramp up your retirement savings, which means finding ways to reduce spending. Try hard to invest the maximum you’re allowed in your 401(k) plan or its equivalent. “If that means doing some hard budgeting until retirement, that’s just a reality,” said Grabow.
By cutting out extras so you can, as Grabow calls it, “capture the cash,” you’ll probably be able to invest 1, 3 or even 5 percent more of your pay than you do now.
Contribute regularly to your employer’s plan and, if possible, stay at your firm long enough to be eligible for its matching funds.
2. Force yourself to learn more about investing. “It’s not rocket science, but the women in my groups thought financial learning wouldn’t interest them and they wouldn’t be good at,” said Grabow. To counteract this misapprehension, they were taught how to read their quarterly retirement plan statements with a discerning eye for investment options and fees. The need to rebalance periodically was hammered home, too.
I’d suggest you spend time reading your quarterly statements and checking out those sites, too.
3. Don’t be shy about asking for help. Knowing that a professional’s guiding hand can turn your education into action, Grabow also doled out guidance on how to choose a financial planner.
At Mortenson, “I want the women to realize saving for retirement is a process and it’s OK to ask for help,” she said.
That mantra, it’s clear, holds true for the rest of us.