Study after study has shown that women are not properly prepared for retirement. Women are less likely to think about retirement savings planning than their male counterparts and they tend to underestimate what their costs are going to be. You are responsible for your own happiness in retirement planning.
Plan For Retirement
First, if you have a life partner, you should decide together what your dreams are for a happy, healthy retirement together; if you’re alone, you should decide for yourself what you want. Then, you should make sure you take an active and informed part in the both planning and execution of your whole financial life/lives, including retirement.
If you don’t, you could end up stressed out and disappointed with a precarious future when your working years are over. Or even worse, you could be widowed with no idea how much or where the money is, or how to manage it to take good care of yourself.
Moreover, women typically operate under a number of handicaps compared to men. Women are more likely to work at lower paying jobs and jobs without retirement benefits. Women, even in today’s society, are paid about twenty percent less than men for the same job.
Women tend to work fewer years overall than men (mostly due to childbearing, childrearing and care of older or ill relatives) and so, not only do they earn less from which to save, they also pay less into social security and get lower benefits later. Moreover, women usually live longer than men and so have to make their money last.
Start Planning Now
What’s a woman to do? First, start your retirement savings plan now! The younger you are, the better you’ll be, but that doesn’t mean that it’s too late to make a difference in your retirement nest egg. Participate in your company’s 401(k) plan, if they have one; many employers make matching contributions to some extent and it’s “free money.”
If your employer doesn’t offer 401(k) or SEP IRAs, open your own IRA. Next, start educating yourself. Talk to your partner about what investments the two of you might have; discuss what you dream for your future. Learn about risk tolerance, both as to your age and your personal comfort level.
Consult a financial adviser or use a retirement calculator to estimate what you should need. There are many on-line – we suggest checking out choose to save.org because it is not associated with a financial planner and has no profit motive to overestimate what you need to save. Stay on top of your accounts and your progress by reviewing your investments at least twice a year and make adjustments to your portfolio as needed.
Consider Working Longer
Finally, think about working a little longer and retiring later; think about a second career or part-time work that’s enjoyable later in life. Tapping into your social security at an older age can substantially increase your monthly benefits and part-time work can still give you flexibility to enjoy your later years while not draining your savings as quickly. By educating yourself, asking questions and being involved in your financial health, you can have the kind of retirement you dream of.