by Kristine A. McKinley, CFP, CPA

Kristine McKinley works with seniors everyday, and has special insight into women's financial needs. Here's her strategy for retirement, Social Security and finances.

Although the income gap between men and women is shrinking, there is still a sizeable gap in how well women are prepared for retirement compared to men. This retirement gap has a number of causes:

• Women live longer than men. On average, women live about six years longer than men, which means women have more years in retirement. Although more years in retirement may sound good, paying for those extra years can be challenging.
• Women earn less than men. The gap is shrinking, but women still earn an average of 24% less than men do. This gap shows up in retirement like this -- women collect less Social Security and earn lower pensions.
• Women are more likely to take time away from the work force to care for children, aging parents, or other relatives. In addition to lost wages, this means less opportunity to save for retirement, and less time to build Social Security benefits.

Ninety percent of women will become totally responsible for their own welfare at some point in their life, whether by divorce or death of a spouse, or by choice. No matter what stage of life you're in, or whether you're single or married, here are some tips to bridge the retirement gap:

1. Start early - women are inclined to wait for the right time to invest. This could be because they are not in the workforce, or because they're afraid they'll make a mistake. Women need to start saving earlier - they live longer.
2. Set goals. It doesn't matter if you're saving for retirement, college or a vacation; you're more likely to achieve your goals if you have a map to follow.
3. Don't be afraid to take risks. Women are often more cautious than men when it comes to investing. Get educated about investing and take appropriate risks to meet your goals.
4. Make retirement a priority. Women are natural caregivers, which often translates to putting everyone else's needs in front of their own. You need to make saving for your retirement a priority, even when you're not in the work force.
5. Get educated. Learn as much as you can about money, investing and retirement. Take an active role in your finances even if you have a spouse or partner who handles family finances.
6. Work longer. Social Security retirement benefits are based on your age, how long you work and how much you earn. Many women make the mistake of taking Social Security as soon as they're eligible. Work for as long as possible, and for the highest salary possible, to maximize your Social Security retirement benefits.
7. Understand your pension benefits. Most pensions have several payout options, including single life (based on the investor's life only) and joint survivor benefits (where the spouse receives some benefit after the investor dies). Since women typically outlive their husbands, it's important to understand these options and to choose the correct one for your situation.
8. Seek expert advice. Investing and retirement planning can be complicated, especially for the novice. You may find, after you learn all you can, that managing your own money and future is right for you. But get a good teacher and do your homework first.

The most important thing you can do to bridge the retirement gap is to take an active role in your finances. Start early. Get educated. It's pretty likely you'll be responsible for your financial well-being at some point in your life, so be prepared.

About the Author

Kristine A. McKinley, CFP, CPA, and founder of Beacon Financial Advisors, teaches individuals and families how to invest and plan for retirement, college, and other financial goals. Kristine is a professional financial and tax planner.

To sign up for free financial planning tips, worksheets, checklists and more, visit Beacon-Advisor.

Some other good links:

U.S. Securities and Exchange Commission

Money Instructor's Retirement Page