Expected lifespan should be taken into consideration in savings plan.
Woman have a longer life expectancy than men but on average make less money to be used to save for retirement, according to The Motley Fool in “Why Are Women Only Saving Half as Much as Men for Retirement?”
When queried about why they think it is so difficult for women to save for retirement, most woman honestly said they are living from one paycheck to the next, with little to spare for savings. They are also paying back student loans. Men say much the same thing, so why is the average female saving so much less for her future?
In a recent Student Loan Hero study, women admit that they don’t know a lot about investment and retirement planning. Women are also more likely to take breaks in their careers to be caregivers, raising children and taking care of aging parents. This reduces their earnings. While some wage equity has been achieved and even made into law, most women do not earn the same as their male counterparts. Therefore, women face special challenges to their retirement savings.
What can be done to address the gap?
- Start by examining your budget and cutting unnecessary expenses.
- Make sure to maximize your employer’s 401(k) match.
- Fight for raises throughout your career. To gain more information on what your position is worth, use websites like Glassdoor’s “Know Your Worth” tool to compare salary data.
- Consider changing your investment approach. If you are investing too conservatively, even though your principal is less at risk, you are actually increasing your risk of an impoverished retirement.
Finally, don’t forget that retirement includes estate planning. An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances.
Reference: The Motley Fool (June 3, 2018) “Why Are Women Only Saving Half as Much as Men for Retirement?”