Planning for retirement is never a simple or easy task, but for many of today’s women, creating a comprehensive retirement plan has never been more of a challenge.
You see, when it comes to establishing a solid financial foundation, women have very different needs and life circumstances to consider. Their lives are certainly different from those of their male counterparts in many ways. Of course, no two women are the same and certainly, everyone has their own circumstances and experiences that define their lives. That said, there are specific challenges women must navigate that largely impact their ability to provide for themselves and their families long into the future:
- Women tend to start investing later than men, exhibit less confidence in their financial skills, and are more likely to serve as financial and emotional caregivers to family members.
- Women are more likely to sacrifice future potential career opportunities and, consequently, their earning potential, in order to raise children or care for aging parents. In fact, women who leave the workforce due to care-giving or family responsibilities can incur a cumulative pay gap that can add up to over $1 million.1
- Women are 4x more likely than men to be widowed, and outlive their spouses by an average of 14 years.2
However, according to a recent study by GOBankingRates, women are only contributing half as much to their retirement accounts annually as men are. In addition, women’s median earnings were 81% of men’s in 2018. Until the income gap gets closed for good, women will likely receive less in Social Security benefits, since those benefits are based on individuals’ lifetime earnings, and will find themselves falling behind with regard to savings and other financial goals.
For all these reasons, it is imperative that women establish a strong foundation early in their careers for their retirement savings.
Why? Quite simply put: you’re WORTH it!
Though you may not have ever had any exposure to managing personal finances, or quite honestly, may not have the time to devote to managing your own finances, it is critically important to simply get started. In our experience, most women are incredible multi-taskers, but tend to place themselves last on their list of priorities. If you find yourself identifying with this behavior, please consider the wise words of Warren Buffett: “The most important investment you can make is in yourself.” See, it is not a mistake to devote time to bettering yourself. In fact, it is a mistake not to.
So – what can you do to begin putting your financial health first? It really is simple:
- Start taking small steps each week to better understand your financial situation. Work to ensure you can answer these questions:
- What is my net worth?
- Am I receiving my employer’s match to my retirement contributions?
- Do I have high-interest debt that needs to be paid down?
- Am I living too far above my means?
- What is my credit score?
- Consider meeting with a financial professional to assess your current behaviors, learn about your options, and proactively account for various possible long-term challenges.
- Boost your confidence by first, understanding your spending habits and second, implementing a budget strategy to hold yourself accountable.
- Ask questions – lots of them. Self-educate by reading up on topics you might be less comfortable or familiar with. Got a topic you’d like to specifically learn more about? Let us know! We’re all ears!
- Understand all of the various retirement account options you have available. Sure, if you’re like most people, you probably associate saving for retirement with a 401(k) or IRA. And while 401(k)s and IRAs are great retirement savings vehicles, there’s an often-overlooked vehicle that outshines them both: a health savings account, or HSA. Stay tuned to the next post in our Women’s Worth Wednesday series to learn all about this incredible retirement planning option.
As you can clearly see, there is no shortage of wonderful ways to begin strengthening your financial know-how. The most important part is to just get started. You’re worth it.
This post is sponsored by HealthSavings. We’d like to thank them for their partnership and dedication to helping educate women on their retirement options and empower them to own their financial futures.
Sources:
1 Merrill Lynch study, conducted in partnership with Age Wave, “Women and Financial Wellness: Beyond the Bottom Line.” 2018; Age Wave calculation based on Bureau of Labor Statistics, TED: The Economics Daily, Median usual weekly earnings of men and women who are full-time wage and salary workers, by age 2016 annual averages).
2 Investment News, “10 Essential Financial Facts About Women”. https://www.investmentnews.com/gallery/20120406/FREE/406009999/PH/10-essential-financial-factsabout-women. Accessed 15 September 2019
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