A 2016 Survey by GOBankingRates found that 56% of Americans have less than $10,000 saved for retirement. Scary stuff. Scarier still is that two-thirds of the women surveyed said they had no savings or less than $10,000 in retirement savings, compared with just over half of the men.
The reasons for these discrepancies are well-documented:
- Women are more likely to work in part-time jobs that don’t qualify them for a retirement plan.
- Working women are more likely than men to interrupt their careers to take care of family members.
- Fewer years in the workforce and part-time wages can result in lower lifetime savings.
On average, a woman at age 65 can expect to live another 20 years, two years longer than a man the same age.* Living longer on less is a risky proposition, but this risk doesn’t have to define your future. Rather, use the information to inform the decisions you make, and the actions you take, today:
- Contribute the max to your retirement savings plan at work.
Save what you can, then save a little more. For 2017, women younger than age 50 can defer up to $18,000 each year. If you’re age 50 or older, an annual catch up contribution of $6,000 is allowed. At a minimum, contribute enough to your 401(k) or other retirement plan to get the maximum employer match available. Your Human Resources representative can help you get started or make changes. - Look for other ways to save.
If your employer doesn’t offer a retirement plan or you’re self-employed, discuss other options with your tax advisor. A traditional IRA or Roth IRA can provide retirement savings as well as tax advantages now and in the future. Simplified Employer Plans (SEPs) and Individual 401(k) plans offer higher contributions for self-employed individuals. - Put the money away, but make sure it’s working.
By and large, women invest more conservatively than men. Seek the advice of an investment professional to align your investment choices with your retirement goals. Taking a little risk now can pay big rewards in the future. - Round up all the “eggs” as you build your retirement nest.
Consolidate retirement plans from previous employers by rolling them into an Individual Retirement Account. This will maintain the tax deferral status of the money and give you a clearer picture of your retirement portfolio.
* US Department of Labor