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Research has found that more men than women have a solid plan for retirement and save money in investments for when they retire.
When it comes to financial literacy, the reality is that women are not well informed in this area compared to other areas like fitness or health. They are three times as likely as men to say they can’t afford to set aside money for retirement.
Not many women are confident that they’ll reach their career goals or climb very high up on the career ladder, thus, do not give retirement savings much thought.
A recent survey by Bank of America on women and financial wellness found that when it comes to saving for retirement, many women have it on their minds but not many take actionable steps in that direction.
No one wants to be a burden. However, the only way to ensure you enjoy a comfortable life when you stop working is by having money saved up for this purpose— retirement.
Here are 5 things all women should know about retirement finances:
There is no retirement finance without retirement planning
Retirement finances always start from retirement planning. Here, you set your retirement goals, decide how much you need to save for retirement, track how long you have until you retire, and settle on the types of retirement accounts that can help you meet your goals.
Investing in the Right Way Can Help Grow Your Retirement Savings
Investing improves your chances of a comfortable retirement. It is a great way to build wealth and with time, your money or financial assets increase in value. There are several investment opportunities and reliable retirement investment software to choose from like SoFi.
SoFi is an all-in-one investment app that charges zero commission fees on every trade at every time. You can open a retirement account on SoFi and start your investment journey.
Avoid withdrawing your retirement savings
Saving money secures your financial future and is one of your tickets to a comfortable retirement. If you withdraw your savings early, you’ll lose the principal, interest, and tax benefits and will be charged a withdrawal fee.
Most importantly, this would affect your retirement plan. Try as hard as you can to keep yourself from taking out your retirement savings.
Hire a Financial Advisor
There are retirement advisors, and hiring one with ample knowledge of retirement finances can help. They help you map out a solid retirement plan and manage your finances including your savings and investments.
Utilize Retirement Savings
Social Security benefits
Paying social security taxes makes you eligible for retirement benefits. You earn credits that qualify you to receive retirement benefits in the future. Also, you can calculate your estimate of retirement benefits to help you plan for your retirement.
Learn more about your social security benefits.
If you’re employed at a company, find out about the retirement plan for employees. If your employer offers a 401(k) retirement plan, contribute as much as you can to the savings account. Taxes charged to such accounts are lower and as the compound interest builds up over time, your savings increases.
401(k) savings are rapidly replacing traditional pension plans in most companies. However, some companies still deliver this retirement plan. If your employer offers a pension plan for employees, find out if you are eligible. Also, learn about what the benefits are worth.
Individual Retirement Account (IRA)
You can open an individual retirement account and start saving right away. IRAs deliver a comfortable way to save money for retirement. You can also automate deductions from your savings account directly into the IRA.