How Working Women Can Secure Their Retirement Savings Now
It turns out, several working women fail to secure their retirement savings. According to a recent study titled CNBC/SurveyMonkey Women at Work, nearly 1 in 5 or 19 percent of working women have no retirement savings. Conducted from February 10 to 14, the study surveyed a sample of 1,068 working women in America.
Calling the numbers “scary”, certified financial planner Avani Ramnani told CNBC. She added that the reason behind this is not because women spend too much money, but because of the fact that working women still earn less as compared to men.
According to a Pew Research Center analysis conducted in January, as of 2018, women only earn 85 percent of what men make. The study based the analysis on full-time and part-time workers’ hourly wages in the U.S.
It was also discovered that 14 percent are not aware of how much money they allocated for retirement savings. According to the CFP and co-CEO of 2050 Wealth Partners Lazetta Rainey Braxton, now knowing how much one has saved up could be stemmed from the fear of whether the savings are enough.
It is a known fact that saving up for your future is essential, as it will give you good financial stability so you can retire comfortably in your later years. If you want to secure your retirement nest egg, here are some tips from financial advisers.
Start Saving Now
If you still have zero savings for retirement, you might as well start now. Ramnani persuades that you should sign yourself up on a program and go ahead with whatever you can. If you have no idea how much to allocate from your monthly income, the ideal amount is 15 percent of your gross income.
A 401(k) plan at work could also help. Make sure that your employees are matching your contributions. For 2020, the maximum contribution is $19,500 according to the Internal Revenue Service.
The next step is to focus on your debt. If you have saved money from your credit card or loan payments, put your savings into a cushion account, said Lazetta Braxton, CNBC Digital Financial Advisor Council member.
Whatever income you receive, raise or bonuses at work for instance, immediately deposit it into your cushion account. Save up as much as you can and aim for at least three months worth of living cost. If you have no 401(k), one idea is to open an individual retirement account.
Ramnani said that women tend to have less confidence when it comes to handling money, causing a lack of knowledge in terms of financial management. Talking to different people to know about their investments and how they make their money move is important.
The lack of information may also be the reason why women are rather conservative when it comes to investment for the fear that if they get aggressive, they will lose their money. However, Ramnani said that due to the wage gap and longer lifespan compared to men, women must become more assertive.
Know Your Goal
58 percent of Americans think that you need $1 million to have a comfortable retirement, but every person’s situation varies. You may feel intimidated seeing the whopping numbers, but don’t let it get you. Ramnani advised to just start allocating 15 percent of your gross salary.
If you are still worried about managing your money and savings, it would be best to hire a financial advisor. Several advisors charge per hour, and you can already get a professionally evaluated financial plan that you can use as a guide, without having to attend annual appointments.
On the other hand, you can also manage your financial plan yourself by using online retirement calculators that will help you know how much retirement savings you expect to have in the future.
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