You may have heard the advice about the importance of saving for retirement and you may know just how important it is to save and still not be able to really put aside money for retirement as you would like. MarketWatch published an opinion piece that asks: “Why is it still so hard for women to save for retirement?“
The article discussed that Millennials have not been observed to be great savers, didn’t mention Generation X, and had this to say about Baby Boomers:
“The largest inequality with income and savings is among working baby boomers who are on the tip of retirement. For working baby boomers, the median deferral rate to contribute to an employer’s 401(k) plan was 7% for boomer women vs. 10% for boomer men, according to the [T. Rowe Price] survey.”
You may have heard three of the main reasons mentioned with regards to why women have a difficult time putting away money for retirement: women take breaks from work to be caregivers, women live longer than men, and women earn less because of the pay gap. An additional reason offered is that women have difficulty bulking up their retirement funds because of the kinds of work women choose. Many women are self-employed, do contract work, work part-time, or work for organizations that do not have retirement plans. You could also argue that certain fields do not receive adequate pay, no matter who chooses to work in those fields.
One of the most important pieces of advice the article offers tells women to start investing sooner rather than later. Instead of waiting until they completely understand finance and investing, women should invest early and often. You have time to educate yourself but don’t wait to contribute if your employer offers matching funds. Whether your employer offers a retirement plan or not you can invest. The writer suggests a target-date mutual fund designed to provide you with funds by investing with your retirement target date as a guiding principle.
If you’re not sure where to begin, contact a Fee-Only financial planner for help.