Why You Need To Act Now
What To Consider
Social & Security References
Retirement is not something you think about every day. For one thing, you’re never going to stop working, right? But at some point you’re going to want to stop (probably) and when that day comes, you’re going to need to have money – because even though your working days have stopped you still have to pay your bills.
Start with a vision – how do you see yourself spending your time in your post-work years? That vision is your goal, and in order to reach your goal, you’re going to need to create a plan. You’re going to need to account for living expenses, travel, healthcare, and many other things. How much will you need? Where will the money come from? The answers to those questions are the backbone of your retirement plan.
So when should you make this plan, and when should you start saving for retirement? Now! Right now! Stop what you are doing and don’t put this task off for one more minute. Here’s why – after a lifetime of working, you deserve the retirement you want, not the retirement you are forced into. Women should be enjoying their retirement, not bagging groceries or handing me a cart at Walmart.
Women face an uphill battle. We start off with numerous disadvantages and are also more likely to be spending retirement on our own because we tend to live longer than our spouses or partners. On top of the income gap and time away from work to raise a family, women typically haven’t spent the time they need to make a retirement plan! Whether that’s because of fear, social programming, or something else, you owe it to yourself to break this trend. Become financially fearless. Take charge of your own retirement.
And start RIGHT NOW!
- The things that get in the way of retirement for women and how to mitigate them
- What you can do NOW to get started (getting started is the hardest part!)
- How to improve your retirement outlook, once you do get started
- About some great online calculators (and discuss some of their pitfalls)
- A bit about how social security comes into play
Why Retirement is a Woman’s Issue
Women are at a disadvantage when it comes to retirement. There are a lot of reasons for that, but the biggest one is about income. Women make .79 to every $1 earned by her male counterpart. That impacts social security contributions as well as savings and investment potential and results in women, on average, having 42% less money than men.
Sources: U.S. Census Bureau, US Department of Health and Human Services, Social Security Administration, Prudential Retirement.
In addition to the income issue, there are many other factors that impact your retirement. Women often don’t make retirement a priority and procrastination is a behavior that will impact your retirement savings.
Here are some other common retirement barriers facing women and ways to mitigate them.
Women live longer. Today’s average 65-year-old man can expect to live until age 84.3; the average 65-year-old woman can expect to live until age 86.6. The earlier you start saving the better off you’ll be.
Women tend to be less financially literate. Education is the key to building a smart portfolio – you need knowledge to make decisions with confidence.
Women rely on their husbands to make financial plans. Such arrangements leave women vulnerable, especially when their husbands pass away. Take personal responsibility for your financial independence through education and personal involvement.
Women take more time off from work to focus on family. When you are working, make sure you are maximizing your retirement benefits.
Women are more likely to be stay-at-home Moms. Have your husband contribute to a spousal IRA on your behalf—up to $5,500 in 2015 (or $6,500, if you’re 50 or older).
Here’s a Biggee! Women are more likely to prioritize other financial goals over their retirement savings. Fund your retirement first, before trying to tackle things like the kids’ college funds.
Some women spend too much on health care. You can trim those costs using simple tactics, such as switching to generic medications and using in-network providers. And take advantage of the tax savings offered by a health savings account.
Women don’t take advantage of ex-spousal social security benefits. If you were married for 10 or more years and you don’t remarry, you may be eligible to collect benefits on your ex-spouse’s earnings record.
Did You Know
Because of longer life expectancies, women tend to spend their final years alone due to widowhood or divorce. Some may never marry. A woman’s retirement could last 30 years or more, often relying on a single income.