Why is retirement planning for women so different from men?
- Women live longer.
- Women have longer life expectancies.
- Women need to ensure their money lasts longer.
Factors about women and money.
- Women make less money than men doing the same job.
- Women pay more for everyday expenses, often called Pink Tax. Examples are razors, haircare, dry cleaning.
- Women don’t negotiate as much as they should.
- Women fall prey to “fear factors” like extended warranties.
- Women leave the workforce to care for children or family members.
- Women often can’t go back into the workforce and pick up where they left off.
- Women are a few steps behind when they return to the workforce.
- Women acquire less retirement benefits.
How much will you need for retirement?
- Considerations are the lifestyle you want to live in retirement.
- Many organizations state that women will need a million to a million and a half to retire.
- Know that at some point there will be no earned income.
How to get to a sound retirement savings.
- 50% of income should be used for living expenses.
- 30% of income should be used for clothing, travel, socializing etc.
- 20% of income should be saved / invested.
- Consider an average of 6% on investing.
One million dollars scenario:
- One million dollars to live 30 years.
- 360 months is equal to 30 years.
- One million dollars divided by 360 months is about $2700 a month.
- Can you live on $2700 a month?
- You may get an average of $1500 SS benefits. $4200 a month.
- Consider it will be X number of years from now, so inflation will impact these numbers.
Steps to take.
- Consider working with a financial professional.
- Take a hard look at your budget and spending.
- See where you can save even an extra $100 a month.
- Aim for the 50 / 30 / 20 budget.
- You can regulate yourself to save for your financial future.
- Saving something is better than saving nothing.