9 Lives for Women Blog

One Sacrifice Too Many? | August 9th, 2012

The work/don’t work rift between women who do and don’t work for a paycheck widened a bit more with the over-played Yahoo CEO Marissa Mayer controversy and the by now dog-eared Atlantic article about “Why Women Still Can’t Have it All”.  I’m not going to debate whether Marissa is hurting women by taking a short maternity leave or tell you why and how I think it’s possible to “have it all” (even though I’ve happily worked non-stop–sans maternity leaves–since age 16).

What I am going to do is put the issues of self-fulfillment, intellectual stimulation, maternal love and child development aside and simply talk about pragmatic matters.

As you decide whether or not to return to the workforce, I believe there is one question that trumps all:  can you afford not to work?

The answer to that question should not be answered only in the context of today:  whether you can meet today’s household expenses, send your kids to camp, take vacations and buy all the clothes you want are not the sole determining factors.  Your answer should take into account financial needs for your retirement years.

In a July 22, 2012 New York Times article, “Our Ridiculous Approach to Retirement”, I was reminded of a math problem very few people want to solve.  This involves the always startling number that equals what you need to have saved for your retirement.  The equation goes like this:  whatever your household income is at retirement age—you need to have 20 times that number in financial wealth to maintain your lifestyle throughout your retirement years.  So if your household income is $100,000 at the time that a sole earner retires, you need $2 million beyond what you will receive from Social Security.  The higher the at retirement income, the more financial wealth needs to be amassed.

Even though I’ve always worked and I consider myself  a strong and intelligent woman, I admit to not always being 100% up to speed on the many moving parts of the retirement savings my husband and I share.  There are times when I fall into “well I was an English major so I don’t understand all that stuff” and times that I take a 1950s attitude that my husband, the financial services executive, has it all under control.

That’s a very slippery slope, especially for women who are not working.  You’ve got to know—and face—the numbers.  Before you decide that you can’t work because of motherhood, figure out all the sources of your financial assets and if—with only one income—you’re on track to have 20 times the sole earner’s income at retirement.

From my days writing books about 401(k) savings and retirement, I know that many, many women will find they are at great risk of falling short.  Too often women are lulled into complacency when they think a husband’s current earnings are decent, good, great or even fantastic.

To some degree we all make sacrifices for our children—buying things and making opportunities possible for them that perhaps we don’t do for ourselves.  But sacrificing your financial future—and a stress-free, comfortable retirement—is perhaps one huge sacrificial step too far.  —KAS

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