As with other areas in life, retirement planning can come with a unique set of challenges for women. When compared to men, women live longer, earn less, and prioritize family and debt payment more. This combination of factors often causes women to neglect planning for retirement.
Although it might seem too overwhelming or too late, there is no better time to take charge of your retirement planning. Keep reading for some tips to set you up for success.
1. Improve Financial Literacy
Since women tend to have lower financial literacy than men, retirement planning can come as a challenge. In order to reverse this pattern, you can learn more about finances by reading books, listening to podcasts, and conducting other research on the topic. Financial knowledge can help you feel more prepared for retirement planning and more empowered in your everyday life.
2. Find Easy Ways to Make Money
If you’re struggling to establish a reliable income, self-employment or passive income are simple and flexible options. Self-employment can mean anything from a money-making hobby to a full-on business operation. More passive ways to increase your earnings include rental property income, stock photo sales, dividend stocks, and cash back from rewards cards.
3. Plan Ahead of Time
When it comes to retirement planning, thinking far in advance is crucial. Figure out the amount of money you’ll need to satisfy your future expenses and goals, such as long-term care facilities and insurance. From there, it will be easier to decide which kinds of strategies to use to achieve your ideal retirement situation.
4. Become a Negotiator
According to a 2016 study, women are less likely to negotiate their salaries than men. This tendency catches up to women during retirement planning, when having enough savings is critical. To build your earnings while employed, find out how much others are paid for similar work and ask for raises, promotions, or higher salaries often.
5. Get a Retirement Account
Opening a retirement account is the key to getting started with planning. For working women, many employers have retirement savings accounts like a 401(k) plan. Others can pursue Traditional IRA, Roth IRA, or spousal IRA accounts.
6. Make Investing Automatic
A great way to simplify your retirement planning is to use automatic payment methods. Instead of remembering to invest money every time you get a paycheck, having automatic withdrawals makes it easier. You’ll be able to build savings little by little without all the hassle.
7. Change Your Mindset
It’s easy to view the planning process from a negative lens, especially if your earnings aren’t where you want them and you feel pressed for time. However, rather than viewing retirement savings in terms of everything you lack, think about all the ways you can start making and saving money right now.
8. Maintain Your Employability
Once all the kids have fled the nest, many women who moved away from their careers tend to return to work. In order to prepare for this possibility, it’s essential to maintain your marketable skills and network with professionals in your field. The ability to work again allows you to earn and save more for retirement.
9. Prioritize Retirement Planning
Even though women have a tendency to place more importance on supporting family and paying off debt, retirement planning should be a top priority too. By starting early, you’ll be able to accumulate more savings to support your future self.
Common Retirement Planning Regrets
After speaking with financial experts, Annuity.org compiled a few popular retirement planning regrets women have. Some women wish they had shared financial responsibilities with their partner, while others cite failing to learn from a professional as another retirement planning error. Lastly, many women regret putting off retirement plans until debt was paid, instead of pursuing both goals at once.
Particularly for women, planning for retirement can come with some hurdles. However, by following the right steps, you’ll be well on your way to a comfortable future. Take a look at this resource for more ways on understanding how to prepare for retirement.