Mind the gender retirement gap

Women are a force to be reckoned with. They’re mothers, doctors, business owners, heads of state and anything they put their mind to. With more women in the workforce (nearly 79 million), there’s a lot of focus on saving for the future.¹ So, what happens when it’s time to turn those retirement savings into a beachside dream house? That’s where the gender retirement gap can come in, but being prepared pays off. Let’s take a look at what the gap means and some key strategies to help you keep it as small as possible.

What is the gender retirement gap?

Ultimately it comes down to this: Women face specific challenges that men don’t when planning for retirement. For starters, women typically earn less than men over the course of their lifetime.² Plus, they’re expected to outlive men by an average of 5.8 years, which means they may have to cover a longer retirement with a smaller nest egg.³ It can seem like an uphill battle—but don’t worry. There are things you can do to overcome these challenges and retire the way you want to.

Take these 5 steps to start closing the gap:

• Start early and save often. Invest as much as you can on a regular basis in a savings account or money market account, especially if you plan on taking any breaks from work to have kids or care for family. That way, the money you already set aside will keep growing. If you can, keep saving even when you aren’t working. The amounts may be smaller, but every little bit helps.

• Make a detailed plan. It’s a good idea to use a retirement calculator to estimate your long-term needs because it can help you stay on track with your savings. Remember to factor in a few extra years of health- and housing-related costs to make sure you’re fully covered.

• Take advantage of employers’ plans. When you contribute to a 401(k), try to make sure you’re making the most of your employer’s matching donation. You can also set up a Roth or traditional IRA account to boost your savings total. Don’t forget to check if you’re eligible for the IRS Saver’s Credit, which gives people in certain income brackets a tax break if they save for retirement.⁴

• Know your worth. When you change jobs or get promoted, be prepared to negotiate for the pay you deserve. Using a site like Payscale can help you determine salary ranges for your position and years of experience so you feel prepared to stand your ground. Once you’ve got the raise, you can start contributing a higher percentage of your income to your retirement account without feeling a tighter squeeze in your budget. Because more saving now can mean more funds later.

• Get educated about investing. Talk to a trusted financial advisor who can help you understand how to balance risk and reward when investing in your retirement accounts. They can also share tips on how to make savings last longer and when to start Social Security to maximize your benefits.

You’re in control of your future

Now that you’re armed with the facts, you’re one giant step ahead of the gender retirement gap. Because knowing your financial options is the first step in making your unique retirement plan even more successful. Through your own strength and determination, you can make sure you reach the comfortable retirement of your dreams. After all that hard work, you’ll definitely have earned some “me time.”