Retirement For Women - Something To Fear?
It is a stark fact that, in the US, average women's earnings are only 76% of men's average income. If that comes as a shock to you, as a woman, then if you consider that fact in the context of your future retirement the shock will reverberate even more.
Whether or not such income inequality is fair is another debate entirely. It is a given fact, therefore women need to plan to take account of that reality. Where that income differential can have dire consequences is in retirement. Most men reach retirement with insufficient capital and income to survive at anything like the standard of living they had been used to. So what chance does a woman have?
To aggravate the potential problem, women typically live seven years longer than men. Add in this mix the ever growing divorce rate, which will lead to many women finding themselves alone in their older years, and the picture becomes bleaker still. The statistics show that most women will be alone by the age of age 56.
So what will happen at retirement age? If a woman has lost several years at work through rearing children, about 7 years on average, she will suffer for it later with maybe only half what her male counterparts will receive in benefits at retirement.
What can a woman do to improve her retirement income?
Here are a few ideas for women to plan for a better retirement:
Increase savings or private pension contributions
Many experts advise us to save about 10 % of our income in order to have a sufficient retirement income If you are a woman, though, try increasing that to 12%. Due to the above listed reasons, you simply will not receive the same amount in retirement pensions as men. When it comes to social security payments in the US, your monthly payment is based on the top 35 years of your work history. If those top 35 years include years you were not working but rearing children, they will be counted as “0 income” and the overall amount that you will receive will be reduced.
Invest More Wisely
Because you will need to save more by retirement age, you will have to more careful with your investments. Know your risk level, and then don’t exceed it under any circumstances! It may be helpful to get professional financial advice from an independent adviser
Participate In Employer's Programs
Many employers offer their employees investment and savings programs, for example 401K plans, and savings matching programs. If you are a woman, you should plan to participate in all, or as many, of them that you possibly can.
Forget Credit and Use Cash
There are an alarming number of Americans who are now in serious financial difficulties. Record numbers of people have filed for bankruptcy in anticipation of the passing of the new bankruptcy bill, which will make it more difficult to file for bankruptcy in the future.
It is easy so easy to get into debt nowadays. Evidence shows that people today spend an average of $1.21 for every dollar they earn. Obviously, that can only lead to financial trouble. The longer it goes on, the bigger the trouble. It is much, much better to spend just $1 for every $1.21 you earn.
Be prepared to be different from the norm and plan for a happy retirement. It will come sooner than you think!