Many women believe that they are too busy to think about their own needs and proactively save for retirement. A study done by the National Institute of Retirement Security showed that women are more likely than men to face financial hardship in retirement. This is largely due to the fact that women earn about 26 percent less than men and spend about twelve years fewer years in the workplace.
However, the good news is that women now have more options and opportunities to plan for retirement than at any other point in history. Here are three ways women can begin securing a strong retirement plan:
1. Educate yourself
The first step is to simply learn what your options are and find out how much money you will need at retirement. A quick way to discover this is to estimate what your yearly income is after taxes and then multiply this figure by 20 or 30.
Find out if your company offers a 401K plan and if they don’t, look into opening your own 401K or Roth IRA plan. You can also hire a financial planner who will give you guidance.
2. Start TODAY
You should aim to save 15 percent of your monthly income towards retirement via a 401K if you work for a company or a 403B if you work for a non-profit, especially if your employer matches your investment. And because unplanned expenses will come up, it is a good idea to have an emergency fund that will cover 3-6 months’ worth of expenses. This will save you from having to take out credit cards or dip into your retirement savings.
3. Begin investing in the stock market
Many women lack confidence and are far less likely to invest in the stock market than men. They want to invest but don’t know where to begin or how much money they will need to make the initial investment.
To get started, you can choose the industry you want to invest it and then do your research on the stock prices and dividends. Follow closely what happens with the company you have chosen but do not act impulsively – stocks go up and down all the time so there is no need to overreact. Check out this blog I wrote on cannabis stocks HERE.