Savings, retirement advice protects women

Women are making tremendous strides in their financial lives. Female homeownership is at an all-time high, with one-fifth of residential real estate now being held by single females.

Women are now the primary breadwinners in roughly onethird of U.S. households. Still, women are more likely to face shortfalls in retirement than their male counterparts.

"Today's women often try to do it all- running a household, caring for a family and working full or parttime jobs- with precious little time to think about the present, much less the future," said Donna DeMaio, president of MetLife Bank. "However, women owe it to themselves to plan for the future."

DeMaio recommends trying to set aside one hour a month to plan for the future.

"Even if you think you don't have time, you need to make planning a priority," said DeMaio. "By considering the options that are available, you can gain greater peace of mind and leave yourself in a better position to meet your goals."

When assessing options, consider the following advice:

+First, pay off debt. For those who have incurred a significant debt burden, it may be wisest to pay off credit cards first. The high interest rates that most cards carry can eat up extra cash.

+Make homeownership work. Homeownership gives a person access to home equity loans or lines of credit.

+Establish a savings plan. Even if a woman needs to start small by saving just $10 or $20 a month, the key is getting started. Many financial institutions will automatically transfer a certain amount to savings each month.

+Consider money market accounts and CDs. Choose a money market account to set aside funds for a rainy day or to wait until a better savings or investment opportunity comes along. Shop around for the best rate from a trusted company. CDs are a good option, too, as they usually earn a higher interest rate than savings accounts. CDs, like money market accounts, are considered conservative investments. Look for banks that offer consistently high rates. Some institutions offer short-term promotional rates that may drop significantly after a few months. Also, consider direct banks, which typically offer better rates than local banks.

Make retirement savings a priority. Although there are fewer women in the workforce (60 percent of women versus 73 percent of men), women, on average, live longer lives. To help jump start retirement savings, consider the following options:

+Invest in an employer's 401(k). This is smart money, because it reduces taxable income and funds grow tax deferred until money is withdrawn. Plus, many companies will match employee contributions up to a certain percentage.

+Think about IRAs. In an IRA, funds and their earnings grow tax deferred until withdrawals begin. An annual contribution may also be fully or partially deductible, depending on income level and whether a person is covered by another retirement plan. For added savings, look for a nofee IRA. Before contributing to an IRA, consider consulting with a tax adviser regarding eligibility to contribute and contribution limits.

+Look for "guaranteed income" in preparation for retirement. According to the U.S. Department of Labor, only 32 percent of women get pension benefits, compared with 55 percent of men. To ensure a steady stream of income in retirement, women may need to purchase guaranteed products such as annuities.

MetLife offers several free brochures to help people better prepare for the future and understand the intricacies of investing, including "Building Financial Freedom" and "Investing Basics." Both are available for free by calling (800) 638-5433 or by visiting www.metlifebank.com.

This story is provided by North American Precis Syndicate Inc.