When it comes to retirement saving, many women lag behind many men. Historically, that has been the case. A recent study by Student Loan Hero offers more evidence of the problem –While 29% of men polled in the study indicated that they have no retirement savings strategy, an alarming 48% of women also answered that they have no retirement savings.1
On top of everything else, there is also the income disparity for women in the United States, where women are earning 37% less per year than men. With all these factors, it’s easy to understand both why women find challenges in retirement saving and why these challenges might seem, at first, insurmountable. It could create a frustration that might cause one to avoid learning what needs to be done to begin saving for retirement. Education and talking with a financial professional, however, have the potential to give even the most frustrated retirement saver a boost.1,2
How can women plan to address this? Here are a few positive steps you can take.
Find out where you stand in terms of savings now. A simple retirement planning calculator (there are many available online) can help you see how much more you need to save, per year and over the course of your career. Retirement planning calculators are for informational purposes only and should not be considered a substitute for a more comprehensive retirement evaluation. A financial professional can help.
Save enough to get the match. If your employer will match a percentage of your retirement plan contributions per paycheck, strive to contribute enough to your plan each paycheck, to ensure that the match occurs.
Ask about automatic escalation. Some workplace retirement plans have this option, through which you can boost your retirement contributions by 1% a year. This is a nice “autopilot” way to promote larger retirement nest eggs.
Ask for a raise. A higher salary means more money to put toward your savings effort.
Make tax efficiency one of your goals. Consult a financial professional about this, for there are potential advantages to having your money in taxable, tax-deferred, and tax-exempt accounts. For example, when you contribute to a retirement plan, you make tax-deferred contributions. This lowers your taxable income today; the distributions from those accounts will be taxable in retirement.
Some of these suggestions you will do on your own, but it may also be a good thing to speak to a financial professional you trust and create a savings strategy that will be of particular help for you and your needs.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Cooper McManus is a SEC Registered Investment Advisory Firm. Securities offered through Securities America, Inc. A Registered Broker/Dealer. Member FINRA/SIPC. Lindsey and Lindsey Wealth Management, Ascent Wealth Management, Cooper McManus, and Securities America are not affiliated.
1 - fool.com/investing/2018/12/19/its-harder-for-women-to-save-for-retirement-heres.aspx [12/19/18]
2 - bizjournals.com/bizwomen/news/latest-news/2018/12/more-than-half-of-women-worry-about-financial.html [12/17/18]