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How should working women save their money?

TODAY Financial editor Jean Chatzky explores women's financial pressures and shares smart tips on how they should invest their paychecks.
/ Source: TODAY contributor

While women are narrowing the salary gap with men, many still feel frustrated with doing the double duty of work and taking care of the home. TODAY Financial editor Jean Chatzky explores women's financial pressures and shares smart tips on how they can save their money:

Women earn more because educational trends are working in their favor.  Today, more women than men are going to med school, law school, business school and getting higher degrees. By the year 2030, the average woman is expected to outearn the average man. And it's not a question of if we should save more — we must save more. Why? Because women outlive men by an average of seven years — which means we need our nest eggs to last longer. 

But nobody is going to hand you anything. As Lisa Belkin noted in her “New York Times” column last week, women still don't ask for more money as often as men do — and when you don't ask, you don't get. So it's time to swallow that big lump in your throat and ask for what is coming to you. Look online for what people in your position are earning ( is a good source), then shoot 5 to 10 percent higher. Then, how should we be saving it?

401(k) and other retirement plan contributionsA retirement plan with matching dollars is like a gift from the gods. Why? Because you get an instantaneous return on your money (typically of 50 percent on a match of up to 6 percent of your salary). Then that money is able to grow tax-free until you retire.  If you don't have a retirement plan with a match, you should still put money away in a retirement plan simply because of the tax deferral.  Aim to put away 10 percent of your money each year. If you're starting to save after age 40, aim to put away 15 percent.

Spousal IRAsOne of the reasons women end up with nest eggs that are smaller (besides the fact that, traditionally, women’s salaries have been smaller) is that women take time out of the workforce to care for kids and older parents.  The myth is that you can’t save for retirement during those years. The fact is, you can. If you have a spouse in the workforce you can contribute $4,500 a year ($5,000 if you're 50 or over) to a spousal IRA.

Rollover indefinitelyAnother big mistake women make is that when they change jobs frequently, they withdraw money from their retirement plans, which costs 40 cents on the dollar in taxes and penalties — before retirement — and spend it. What women should do is roll it into an IRA, new employer’s plan, or leave it in their old employer’s plan where it can continue to grow tax-deferred.

Jean Chatzky is an editor-at-large at “Money” magazine and serves as AOL’s official Money Coach. She is the personal finance editor for NBC’s “Today” show and is also a columnist for “Life” magazine. She is the author of four books, including “Pay It Down! From Debt to Wealth on $10 a Day” (Portfolio, 2004). To find out more, visit her Web site, .