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Women face tough financial prospects in retirement.
According to the U.S. Census Bureau, about 50% of women ages 55 to 66 have no personal retirement savings, a higher rate than men (47%) data. Those who do have retirement savings are less likely to have $100,000 or more (22% vs. 30%).
“The picture is pretty bleak for women who don’t have enough saved for retirement,” Cindy Hounsell, founder and president of the Women’s Institute for a Secure Retirement, told CNBC on Tuesday. women and wealth event.
Challenges facing women’s retirement savings
The typical woman earns less than a man: about 82 cents per dollar, according to to the Pew Research Center. The gender pay gap has barely improved in two decades, making it harder to save for the future.
At the same time, women must further increase their savings. Women are likely to live an additional 21 years when they retire at age 65, nearly three years longer than men. according to Go to the Employee Benefits Security Administration.
Mariannela Corrado, a certified financial planner and CEO of Tobias Financial Advisors in Plantation, Fla., said a shortage of retirement savings could mean women have to cut back on the lifestyle they were accustomed to while working.
She told the Women and Wealth event that they could become a burden to their children if they had children who could provide financial support.
Compounding the problem: Caregiving, especially spousal care, has “more detrimental economic impacts” on women, according to National Retirement Security Institute. Research has found that the same is true for divorce.
Advice on getting on track for retirement
However, there are ways that women can increase their savings.
At a high level, Corrado said, they can improve cash flow by increasing inflows (i.e., revenue) and reducing outlays (i.e., expenses).
For example, Corrado said, if women think they are underpaid, they can sit down with their managers at work and ask about growth opportunities and find ways to have higher earning potential. Show managers where you can add value and work toward getting paid fairly, she adds.
This may be easier to do in some states because Salary transparency laws have evolved to require employers to disclose salary ranges for job listings.
Additionally, Corrado said, women can conduct an annual personal spending audit and cut budget items that don’t add long-term value. She said that “self-driving” expenditures, such as automatic toll collection, should be reviewed.
Corrado said women should also check their workplace benefits to determine which ones apply.
For example, don’t waste money by not getting your company’s full 401(k) match, she says. Self-employed individuals can also set up their own 401(k) plan. People who can’t participate in a workplace retirement plan can save in an IRA or other type of savings account, she said.
