5 Retirement Solutions Every Woman Should Know
If you’re thinking about your future, it’s never too late to start saving up. Read on for retirement solutions every woman should know.
Are you a woman who wants to plan for your financial future now?
According to GOBankingRates.com, one out of every three Americans has no money saved for retirement. It’s a sobering reality and one worth considering for yourself now.
A woman has an average retirement age of 66 and a life expectancy of 81.2 years old. With an expected average of more than 15 years without regular income, it’s important to plan now for the challenges ahead. This is even more important if you wish to retire before age 66.
Read on to learn 5 important retirement solutions every woman should know.
1. Participate in a Retirement Plan
Your employer’s retirement plan can be an effective way to save for life after work.
To make the most of the plan, you should automatically enroll in it as soon as you are allowed to under work rules. But once you are enrolled, you should choose to automatically increase the amount you contribute each year.
As you work with a company and receive pay raises, you should re-evaluate the amount you are contributing to your plan. This means considering what you need to live on in the future and any life changes from the previous year.
2. Take Advantage of Employer Match Programs
If your employer offers to match your retirement contributions, you can’t afford to pass it up. That’s because an employee match program is like receiving free money.
For example, let’s say you earn $100,000 per year and your employer offers to match your 401(k) contributions 50% up to 5% of your salary. This means if you contribute $5,000 to your 401(k), your employer will deposit another $2,500.
This is money that you earn just by participating in the 401(k) program!
3. Automate Deposits to Savings
You can set aside money for retirement by automating a deposit to your savings account.
By having an automatic deposit when you receive your paycheck, this will send money directly to a separate account. This is deducted from your check before you ever see it, so you can become comfortable with living off of less.
The money in that account can be used to fund your 401(k) or invest in stocks or other tools to help you grow your nest egg.
4. Set Short- and Long-Term Goals
As part of your retirement solutions, you should set out a list of short- and long-term financial goals.
Do you have a lot of existing debt that you want to pay down?
You should focus on paying off short-term loans for things like vehicles and furniture. Your plan should also set forth how to pay off your mortgage so that you own your home debt-free.
You should determine these plans alongside your retirement goals. This way you are able to focus on paying down debt while also saving for retirement.
5. Start Today
There’s an old saying in finance that, “A dollar today is worth more than a dollar tomorrow.”
By putting a plan into motion today and not waiting, you can maximize your retirement contributions and make your money work for you.
For example, $500 put in an investment today that earns an average of 5% annually would be worth $1,039 at the end of 2033.
The time value of money changes quite a bit if you wait five years to do make your investment.
That $500 investment made five years from now, earning the same rate of return, would only be worth $814 at the end of 2033.
Wrapping Up: Retirement Solutions for Women
As a responsible woman, it makes financial sense to focus on retirement solutions now.
By being disciplined with your money and focusing on retirement, you can help ensure you have what you need to live the life you want later.
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