The gender pay gap has remained remarkably stubborn for decades and inevitably becomes a significant shortfall at retirement.
By the end of her career, a full-time working woman will have lost $417,400 of income, the Center for American Progress found.
Compared to their male counterparts, women save about 30% less by the time they retire, according to a separate TIAA report.
In addition, “women are retiring two years earlier, on average, and live an average of five years longer than men,” said Shelley-Ann Iveka, senior director of financial planning strategy at TIAA.,
Leigh Singleton, director of financial education at banking app Monify, said, “Women tend to live longer than men, so they need a larger retirement fund and women make less money, so it’s more difficult for them to save.” It happens.”
“That’s the puzzle we’re facing.”
To that end, here are Singleton’s top tips for closing the retirement savings gap once and for all.
1. Know Your Spending Habits
“The first step is to see where you’re spending your money,” Singleton said. This will help you identify regular expenses that can take money away from your long-term goals.
“Take a step back and see what’s most important to you — maybe it’s the down payment on a house,” Singleton said.
Once you’ve identified areas where you can deduct, direct those funds into an investment account and gradually increase the amount over time.
The sooner you start, the better your position, because that money will grow exponentially over timehe said.
2. Budget Before Buying a Home
If you’re saving for a home, which is usually the most important purchase people make in a lifetime, consider The full cost of your housing choice, Singleton advised.
On top of that, utility costs, insurance premiums, and HOA fees can add up to a lot on a monthly bill.
To live within your means, “the most common rule of thumb is that your total housing cost should not exceed 30% of your gross monthly income, which is your total income before taxes and deductions,” Singleton said. .
Although buying a home often feels like an emotional decision, consider it as any investment, she said.
“Of course, you want to buy a home that looks good to you, but look at it as an asset.”
3. Start Retirement Planning Now
“For many people retirement seems so far away that it’s easy to avoid,” Singleton said.
Nevertheless, since females are more likely to survive than males, at some point most females will become the only financial decision maker in their life,
“Whether they are married or single, women need to assess their situation and plan accordingly,” she said.
Singleton cautioned that the loss of a spouse, second marriage and stepchildren can further complicate key issues such as estate planning, tax planning and long-term financial planning and investing.