Women take on many roles throughout their lives- ranging from caregiver to career professional. It’s common for women to prioritize everyone and everything else ahead of their own well-being including retirement. This problem is further magnified by the fact that women earn about 85 cents to every dollar earned by men (or even less for minority women) and women generally tend to live longer than men by about 5 years. The combination of these various factors results in a significant gap in the amount of retirement assets women need and the amount of retirement assets women have accumulated. There are some key actions women can take to help bridge the gap:
Maximize Retirement Savings
Women often put their careers on pause or reduce their workload for several reasons from rearing children to taking care of aging parents. In fact, a Pew Research survey found that 42% of working mothers say that at some point in their working life, they reduced their hours to take of children or another family member. When we do so, we miss out on pay but also potential retirement benefits such as a company match or profit sharing. When given the opportunity, women with access to a company sponsored retirement plan should take advantage of the benefits and set aside as much retirement funds as possible. If you are under 50, you can defer as much as $19,000 dollars (in 2019). If you are over 50, you should take advantage of the additional $6,000 available in catch up contributions. If you aren’t eligible to participate in a company retirement plan, you could still save for retirement by opening an IRA or Roth IRA. The maximum IRA contribution is $6,000 in 2019, with an additional $1,000 in catch-up contributions if you are age 50 or older, according to the IRS.
