While all employees should have a plan in how they should save up for retirement, female workers have different obstacles standing in their way of comfortable retirement. According to USA Today, female employees still make less than their male counterparts. Their financial circumstances affect how they strategize and save up for retirement. Being knowledgeable of the challenges women face while saving for retirement will better equip you as an employer or executive.
“Women face the reality of longer lives with fewer financial resources to fall on,” said Debra Whitman, AARP executive VP. “They are paid less than men on average – 77 cents on the dollar, which can add up to half a million dollars over a lifetime.”
Women may have reduced savings due to removing themselves from the workforce for periods of time to raise their children or take care of sick and elderly relatives. This time away from work can reduce the total amount saved up in retirement savings and Social Security benefits. Since women accumulate less money than men in their lifetimes, they should save more of their income for successful retirement. Women are also more likely to outlive men, meaning they have to find ways to make their savings last.
Lena Haas at E-Trade said women need financial advice for a successful retirement; however, trusting financial planners is an issue. Studies have shown that women are more uncomfortable with financial professionals even more so than a used-car salesman. But a little guidance can make a huge difference in savings and should be consideration.
Here are three ways women can overcome saving obstacles:
1.Have a savings plan in mind
Lena Haas recommends that women establish plans to save up for retirement, which could be done with a financial planner. HR consulting firms that provide retirement plan services can also be a valuable way to receive the information for saving effectively.
2.Develop multiple sources of retirement money
In optimizing their retirement savings, the Women’s Institute for a Secure Retirement said women need multiple sources of money. According to U.S. News, numerous sources include Social Security, a retirement savings plan or pension, and individual savings.
3.Save more than you need to
With inflation reducing the value of money and women needing more money due to longer life spans, women should consider saving more than they think they will need. The Women’s Institute for a Secure Retirement suggests substituting 100 percent of their income during retirement to pay for their costs.
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