Women: Take Control of Your Financial Outlook
Saving for retirement is important for everyone – but women have unique challenges that can affect the way they approach saving.
On average, women live longer than men. American male life expectancy is around 83 years, while women tend to live 85.5 years1. This means women must plan for their retirement savings to last years or even decades longer than the average man.
The gender wage gap continues to affect women. Studies show that females earn an average of 79 cents to the dollar compared to men2. Creating a long-term, strategic retirement plan is essential for women to ensure they are able to keep their goals on track. Saving early can also offer women the power of compound interest to boost their savings.
Women, on average, take about 12 years away from the workforce3. This career interruption may be due to child care or elder care, and it results in lost time and wages, which affect retirement savings. Women can help alleviate the effect on their retirement by planning in advance, if possible, for any foreseeable career interruptions.
Although these challenges are often unavoidable and unpredictable, taking a proactive approach can help women stay in control. Here are some action steps you can take to get started:
Think about your goals for the future in terms of career, hobbies and personal life. Take stock of the things you want to accomplish and assign financial goals to each one. For example, if you have a goal to start your own business or to travel, set realistic financial expectations for achieving those goals and consider how they may affect your retirement plan.
Do you know how much you have saved right now? Do you know how much you plan to save by the end of the year? Do you know if your current saving strategy puts you on track to reach your retirement goals? Take an honest look at these questions, and decide what you can do to save more, as well as what resources you can employ to get you there. Check out our retirement check-up calculator to see where you stand.
Once you have established your goals and where you stand, it’s time to create a plan. Start with a household budget. This can help you assess areas where you can optimize your savings. Next, work on eliminating debt – interest from credit card and student loan debt can eat into your saving strategy. Finally, enroll and/or increase your contributions in your workplace retirement plan. Make saving even easier by turning on automatic contribution increases.
Utilizing these strategies can put you on track to take charge of your financial future, and live it on your terms.
1 National Center for Health Statistics. Health, United States, 2015: With Special Feature on Racial and Ethnic Health Disparities. Hyattsville, MD. 2016.
2“Your Right to Equal Pay,” the White House, April 2015 (https://www.whitehouse.gov/issues/equal-pay#top – retrieved May 2016).
3“Women and Investing Statistics: Why More Women Should Plan for Retirement,” A Secure Life ® (asecurelife.com) – updated July 2015.