Women’s Nest Eggs Grow At Slow Rates

You’re proud, and you should be. You’re investing in your 401(k) plan and watching your nest egg grow. Unfortunately, you may not be doing enough.

According to a recent survey by Chicago-based Harris Bank, while women are becoming more savvy about finances, they also a have a false sense of security that could leave them vulnerable.

Ironically, while the women surveyed earned at least $40,000 a year, most weren’t saving enough for retirement or adequately planning their estates.

“Many women simply have not worked the numbers,” said Judy Phillips, senior vice president and head of Harris Bank’s Investor Center. “They just have an idea that, magically, a certain amount (of savings) will be adequate. Perhaps they’re counting on work savings plans or assuming they’ll receive their husband’s pension or an inheritance from their parents.”

At the same time, almost 80 percent of the women said they take a “moderate to conservative” approach to investing. Because many women invest too conservatively, they’re not earning adequate long-term savings returns.

The survey also found that almost a third of the women didn’t have a will. Every person with any assets needs a will, Phillips said, because some of the biggest family fights are over personal belongings.

While the survey shows more women are better informed about finances than their mothers were, they need to take a more realistic look at what will be required for retirement.

Banks and brokerage firms have easy-to-use forms that help calculate how much money you will need to save to maintain your existing life-style during retirement.

After figuring out the numbers, find a trusted investment adviser, Phillips said. That person can show you how to invest more aggressively to maximize your savings.

Another part of planning for the future is talking with your parents about their finances. Some baby boomers unrealistically expect to use their inheritances for retirement.

According to the survey, more than one quarter of the women had a poor or only fair understanding of their parents’ wishes. Unfortunately, not knowing about your parents’ estate plans can lead to sizable estate taxes, and lengthy and expensive legal hurdles.

Although more women are talking with their children about finances, it’s often not easy to ask their parents about their savings. Sometimes, finding a third-party professional makes the process a lot more comfortable.

Fortunately, most women are better informed about finances than their grandmothers were, but grandmother managed because she was a good saver. That’s one of the many things to learn.

Let’s do lunch: Just because networking has a bad reputation doesn’t mean you shouldn’t do it. So says Barbara Pachter, Cherry Hill, a N.J.-based business communications trainer and author. “No one can count on having a job for life, let alone for next year,” she says. “Networking can help you initiate and cultivate important contacts, help you get the job you want, and position yourself to your best advantage.”

Rules that rule: Act as if you know what you’re doing - even if you don’t. Don’t become too attached to your clients, or your goals. Find your opponent’s Achilles’ heel - and go for it! Make yourself visible. Take risks. And keep playing to win, even when it’s no longer fun. Those are among the suggestions from psychologist Adrienne Mendell in her new book, “How Men Think: The Seven Essential Rules for Making It in a Man’s World.”

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