The gender gap has been in the news recently with Microsoft’s CEO’s suggestion that women should not ask for pay raises. There is another reason the gender gap should be in the news, however; and we may not feel the repercussions for years—the retirement years, in fact.
There are several reasons as to why men and women do not have an equal opportunity to achieve a financially secure retirement.
Women as single parents. As women are more likely than men to be single parents, saving for the future can often take a backseat to providing for the present.
Women have more employment gaps. Women are more likely than men to take time away from the workforce to care for children or aging parents. Doing so also takes away income and employer-matched retirement benefits.
Women seek part-time work. When compared to men, a higher percentage of women work part-time, which typically means no or reduced retirement benefits.
Women get paid less. It’s an old argument, but, unfortunately, still a true one. And the salary gap grows exponentially over time, resulting in lower lifetime earnings, lower Social Security benefits and lower saving power.
Women live longer. Research shows that women tend to live longer than men, creating a greater need for appropriate savings.
By recognizing these legitimate obstacles, women can start to identify the gaps in their saving and investment practices and start to take ownership of their financial future.
1. When choosing between saving for college and saving for retirement, choose retirement. You can always borrow money for your child’s education.
2. Work with a financial planner to help determine how to fund your retirement lifestyle.
3. Use your resources. Find retirement calculators and do your research to determine what you think your monthly retirement income should be. The calculators can also formulate how much money you should save monthly to achieve your goal.
4. If your employer offers a retirement plan, participate. Also, make sure to contribute enough to take advantage of your employer’s full match, if available.
5. Use your resources and develop your plans for “the next best thing.” Talk to friends and family about your retirement, and develop action and cost-cutting plans in the event you must retire early or have to stop working to care for a loved one.
6. Don’t wait. Start saving for retirement now.
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