$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$ Wealth Healthy Women Newsletter Healthy Attitudes ==> Wealthy Women [TM] April, 2003 $=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$=$ IN THIS ISSUE: 1. Note From Your Editor, Lynne 2. Article: "Getting Real" About Retirement 3. Resource Spotlight: Retirement Resources 4. Free teleclass: Retirement Readiness: Are You On Track? Guest Denise Fort, Financial Advisor, American Express 5. Upcoming Events: FLASH! on Love and Money ^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^ To subscribe to "Wealth Healthy Women" [TM] send an e-mail to whw-request@WealthHealthy.com with "Subscribe Newsletter" in the subject line. ^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^ -=- Note From Lynne -=- Dear Reader, As I approach 50 (OK, 49), the "R" word has become more real to me. Yes, in the not-so- distant future, I will be RETIRING. Naturally, I find myself reading about ways to develop my "nest egg". However, I decided to cover this topic in Wealth Healthy Women because the news was scary. Not only are many Americans NOT saving for retirement, or saving minimally. They are also shouldering substantial debt and continuing to spend heavily. This situation is particularly troublesome for women who live longer, earn less and save less than men on the average. ** See "Let the Facts Speak for Themselves" in the feature article. ** To help you increase your retirement readiness, read the feature article on "Getting Real About Retirement" in which I share five "must-know realities." Then, join financial advisor Denise Fort and myself on Tuesday April 22 at 7:00pm to get your "nuts and bolts" questions answered on preparing financially for retirement. There is still time to register. See the teleclass section of this issue for instructions. Denise and I look forward to talking with you on Tuesday evening! Warmly, Lynne ^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^ Lynne Hornyak, Ph.D., Editor e-mail: Lynne@WealthHealthy.com Coaching busy professionals to greater financial freedom and well-being. ^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^ -=- Feature Article: "Getting Real" About Retirement -=- Women tend to live longer than men, have lower incomes and save less. Let the facts speak for themselves: $ The average life expectancy for women and men is 79 and 73 years, respectively (and is on the increase). Consequently, women have to plan for longer retirements. $ A poll by Money magazine (November 1997) found that nonretired men plan to retire with average savings of $462,000 compared to $245,000 for women - an 89% difference. $ Women's annual retirement income lags that of men, $6,020 compared to $10,450, according to Edward Jones Investment Services (Executive Female, February/March, 2002) $ Nine out of 10 women will be responsible for their own finances at some point in their lives (U.S. Census Bureau). $ Yet, 56% of women surveyed by MDRT, an international association of life insurance and financial services, stated that they plan to rely on their husband, inheritance, or stock market windfalls to support them in their later years (Executive Female, February/March, 2002). We may not be able to single-handedly change realities such as women's lower pay or reduced savings because of time off to raise children. And we may not want to change other realities such as living longer. Yet, we often overlook the influence of expectations and mind sets on our financial behavior. One HUGE act of self-care that we women can do is to "get real" about our financial future. (**Please note: "Getting real" is not a gender- specific issue. Men need to heed similar advice but WHW is committed to empowering women by the "knowledge advantage.") $=$ GETTING REAL By "getting real," I simply mean seeing the circumstances of our lives clearly, and taking them seriously in our own behalf. Here are five "realities" that I mined from financial resources that have to do with shifting mind sets and expectations. 1. Start planning for retirement regardless of your age. In fact, many retirees surveyed in Money magazine (November, 1997) wished that they had started planning and saving in their early 20s. For those of us who are past that age, it's never too late. Just know that the older you are, the more you will have to contribute yearly to retirement savings in order to reach your goals. 2. Develop retirement goals so that you CAN figure out how much money you will need in retirement. Stan Hinden ("Is There Enough for a Nest?", Washington Post, August 26, 2001) points out that, without goals, you can't really know if you're saving enough to retire comfortably, which results in needless worry and blind efforts. 3. Use realistic values in your calculations when projecting your retirement spending and savings plan. Many folks make serious mistakes by underestimating life expectancy, underestimating retirement spending and living costs, and overestimating the expected rate of return on their investments. To be realistic:  Assume that you will live until age 95. (Jonathan Pond, BottomLine/Personal, March 1, 2003).  Assume that you may need 80-100% of your current income in retirement. Many individuals project that they will be spending less (nonretirees in Money's 1997 survey assumed they would need only 53% of current income while retirees reported that they were typically requiring 71%!). Financial experts note that entertainment, home maintenance and health care costs often rise in retirement, wiping out savings from other cost reductions.  Assume a reason rate of return on investments. Many of us came to expect double-digit returns in the 1990s. Some experts are predicting 6-8% as a conservative to reasonable estimate for the near future. 4. Calculate the true costs of what you want to accomplish. For example, you may want to save for retirement and for your children's college education as well. Calculating the actual dollar figures of these goals may reveal that you cannot do both, at least as you've envisioned them. That means revising expectations-- both yours and others -- and making hard choices. The advice of experts for the above dilemma? Fund your retirement first. Children can get loans, and they will thank you for not having to support you financially in your golden years. 5. Consider that you may need to budget for more people than just you and your partner (if you're in a relationship). Money's 1997 survey found that more than one-third of retirees were helping to support children and grandchildren. In addition, of the 36% of retirees who still had parents living, 23% were helping them financially. This situation is slightly different than the goals conflict mentioned above. You may have family members in serious need who cannot care for themselves financially. And your personal values may dictate that you adjust your retirement budget for their well-being. On the other hand, there is the issue of expectations. Do your children expect, and have you given them reason to expect, that you will provide for them in their adulthood? Thomas Stanley and William Danko, in their book The Millionaire Next Door, refer to this as "economic outpatient care (EOC)." Financial gifts are different from EOC -- they support independence rather than maintain dependence. Furthermore, financial advisors caution about making substantial loans to family and friends. Many loans have a way of becoming "gifts." And big withdrawals from your nest egg early on can severely affect resources for your later years (Wall Street Journal, October 22, 2001). $=$ TIPS 1. Set financial goals. Goals can help to motivate and discipline your savings. And remember that it is critical to realistically assess the price tag attached to those goals. 2. Estimate your retirement spending. See the Resource Spotlight for retirement calculators. 3. Take action NOW to increase your retirement savings. If you are employed, participate in your company's retirement plan to the max. Investigate the details of your company's pension plan. If self-employed, take advantage of Keogh, IRA and SEP retirement plan options. 4. Analyze your obstacles to saving - current debt, credit problems, spending habits, loss of income, low income, unexpected expenses. While we cannot anticipate events such as job loss, medical emergencies and natural disasters, we can take constructive action to reduce debt, improve our credit rating, reduce spending habits and improve our earning potential. There are many books, websites and resources such as financial coaches who can help you to make the changes that you need to make. 5. Develop realistic financial expectations with children, other family members and friends. 6. Keep your nest egg safe. Invest time in understanding your investment options. Consider hiring a financial advisor to guide you through the maze of options. And, attend our April 22 teleclass - it's FREE and a great ROI*! (*Return on investment - one hour of your time for an hour of Denise's expertise!) $=$ REFERENCES Cracks in the Nest Egg by Glenn Ruffenach, in The Wall Street Journal, October 22, 2001. Is There Enough for a Nest? by Stan Hinden, in Washington Post, August 26, 2001. The Millionaire Next Door by Thomas Stanley and William Danko, Pocket Books, 1996. The New Rules of Retirement by Allan Sloan, in Newsweek magazine, April 1, 2002. What to Do Now to Retire Rich by Galina Espinoza, in Money magazine, November 1997. Will You Have Enough to Retire? By Jonathan Pond, in Bottom Line/Personal, March 1, 2003. Women and Retirement, by Tamara King and Mandee Heller, in Executive Female magazine, February/March, 2002. ^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^ -=- Resource Spotlight: Retirement Resources -=- $=$ Free Retirement Financial Calculators - Website Sources The Ballpark Estimate at www.asec.org. Website of the American Savings Education Council. www.moneycentral.msn.com www.smartmoney.com/retirement www.kiplinger.com/managing/retirement $=$ Sources of Information Social Security Administration - 1-800-772-1213 www.ssa.gov American Savings Education Council - (202)-775-9130 www.asec.org The Council is an excellent source of financial information. Pension and Welfare Benefits Administration US Dept. of Labor - (202) 219-8776 www.dol.gov/dol/pwba ~ ~ ~ ~ ~ ~ Reading Resources: If you have read a book that has made a difference in your money life, send a one or two paragraph review to Lynne@WealthHealthy.com. As long as it meets certain editorial guidelines, We will publish your review in a future issue, with full credit to you! ^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^ -=- WealthHealthy Announcements -=- $=$ April Teleclass $=$ -= RETIREMENT READINESS: ARE YOU ON TRACK? =- Guest Interview with financial advisor Denise Fort, American Express. This is your chance to get your retirement questions answered. Benefit from Denise's years of experience as a financial advisor, and her particular interest in readying women for retirement. When: Tuesday, April 22 7:00 - 8:00 PM Eastern Time Where: The comfort of your home or office! When you register, you will receive the telephone number to call for the teleclass. Cost: FREE How do I register? E-mail Lynne@WealthHealthy.com, with "Register April 22" in the Subject line. In the body of the mail, please include your first name, preferred e-mail address for us to send you the phone number, and any questions for Denise. ~ ~ ~ ~ ~ -=- Upcoming Events -=- LOOK FOR: FLASH! Conversations with Lynne Hornyak and relationship coach Kathryn Lord about love and money. (Teleclass) Heres what Kathryn and I are going to do: For each teleclass, we will pose a question or two that will be the focus. The question(s) will be announced in our newsletters. After the call, we'll summarize the discussion points and publish them in the following edition for those who couldnt join us. Wealth Healthy Women/FLASH will come out a week before the teleclass, so you will have time to put it on your calendar. Well include information on how to register, you email us, and you are on the list. Easy! And to make things even MORE fun, at each group we will give away a free coaching session. All you have to do to have a chance to win is show up! ^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^ To hear a 10-minute description of the WealthHealthy approach, as well as a bit about me, you can call 1-212-461-2660. If you are interested in coaching, simply e-mail me at Lynne@WealthHealthy.com or call me at (202) 387-5923. Please include your name, e-mail address, phone number and brief description of your interest in being coached. ^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^ Pass this newsletter along to friends, family, and colleagues who also may be interested in moving toward greater financial freedom and well-being. They can subscribe at http://WealthHealthy.com or by sending an e-mail to whw-request@WealthHealthy.com with "subscribe newsletter" in the subject line. ^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^ PLEASE NOTE: Wealth Healthy Women [TM] is intended for informational and educational purposes only. It is not a substitute for financial, legal, accounting, psychotherapeutic, or other professional advice and consultation. ^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^ Copyright 2000-2003 Lynne Hornyak. All rights reserved. The above material is copyrighted but you may retransmit or distribute it to whomever you wish as long as not a single word is changed, added or deleted, including the contact information. However, you may not copy it to a website without my permission. Reprint permission will be freely granted upon request. Advance written permission must be obtained for any reprinting of this material in modified or altered form. ^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^`^ $=$ CONTACT INFORMATION $=$ Lynne Hornyak, Ph.D. WealthHealthy.com Phone: (202) 387-5923 Fax: (202) 244-3373 e-mail: Lynne@WealthHealthy.com Web: http://WealthHealthy.com