- Retiring comfortably can be difficult for everyone
- Minimizing the gender gap can help all save more
- Retirement planning matters to men and women
It’s hardly a secret that men earn higher wages than their counterparts in most countries; this is called the gender gap. According to a 2019 report, female employees earned $115 less of the male employees’ wage in the retail industry in the US.
Among several societal implications of this gender gap is an impact on retirement benefits. Also, other factors contribute to women having merely enough in their retirement accounts to cater for themselves and their families when they retire.
We shall consider these factors and how they affect retirement for women. You’ll also see some steps that the women could take to remedy the situation.
It is rare for anyone to arrive at an amount higher than what they have contributed at retirement. And, the major reason why female workers end up putting less in their retirement savings is the obvious wage gap that exists in most workplaces in the United States. Practically, what you’ll contribute to your IRA is dependent on what your paycheck says. So, in the end, you will arrive at a lower amount if you earn less.
Also, some expenses eat into most women’s budgets, you can imagine earning less and spending so much. First, most women are caregivers, they naturally seem to have the responsibility of taking care of their loved ones. This is capable of taking a bulk of what they earn.
From studies, women seem to practice less wealth-building principles. The majority of them would rather store cash in other places rather than an investment account. In this way, they miss out on the benefits those accounts offer, benefits such as tax defer and compounding. And of course, if your money isn’t growing, it is most likely prone to the impacts of inflation.
Statistically, women live longer than men, this means that there may be more older women than older men. And, most certainly, they will have to spend a large amount of their money on health care, since old age comes with some health challenges.
Consequently, even though women may need more money in the golden years, they may not have enough due to less contribution.
Women, Gender Gap, And Retirement
First of all, if you do not have retirement savings, that may be a wrong decision. You can start saving now in an IRA or even a non-retirement account.
Then, a little more monthly may make a whole difference. If possible, max out your 401(k) or 403(b) contributions and you can continue to save in a separate retirement account such as IRAs yearly.
https://www.irafinancialgroup.com/learn-more/financial-success/women-and-stocks/Investing your money is one of the best ways to achieve a good financial life, whether now or in the future and there are lots of them. Even if you don’t have the skill to manage your investments, there are hands-off accounts where an investment manager does everything for you.
Don’t just have plans for 5-10 years, save with long years in mind, this may help you save up more. You can use a retirement score calculator or ask for an expert’s help to do this.
Consider taking advantage of a health savings account (HSA) if your plan allows that. HSA lets you split your contributions so that you can invest part and keep part as cash. The cash is to make direct payment from your account for your qualified medical expenses, the other serves as long-term savings for health care costs when you retire. HSA also offers some tax benefits.
Since women retire earlier than men yet live longer, the possibility of needing more money after retirement is higher. Also, the gender gaps are not helping matters, so you should do what you can to boost your standard of living at retirement.
To add to what you can do, if you can wait until you’re 70 to take your social security benefits, you stand a chance to get ahead.