Women are saving less than men for retirement. Does that shock anyone? It doesn't shock me. I figure that because women typically make less than men they naturally would save less for retirement. I stumbled upon this video that goes into this topic more in-depth. There video shed some light on what it actually means. Do they save less just because they make less? Watch the video.
First they aren't just saving less than men, but considerably less. On average women are saving $34,000 while men are saving $70,000. Of course this is mainly because on average they are making less than men and more women have more part time jobs. This proved my first obvious assumption that because they are making less they are saving less.
Is there anything else that explains why they are saving less? Yes, and it is what I found really interesting from this video. The percent of their pay that they are putting into retirement accounts is less than men. On a side note, the earlier you start saving for retirement the lower your percent of pay you will need to contribute to your retirement accounts. It really does pay to start as early as possible. They are also not taking full advantage of contribution matches from their employee as often as men do. Another big no no. If your employee offers some sort of match benefit it is always wise to get the full match. It is free money!! If you are not getting the full match then you are just missing out on free money. Another interesting thought is why do women contribute less percent to retirement accounts then men? Is there anything that could explain this? Yes there is more insight as to why they are contributing a less percent. It is becaues women (compared to men) typically understate how much they are actually going to need for retirement. Women typically live longer and health care costs are going to be greater. It is vital that you overestimate how much you are going to need rather than understate.
It is more obvious to me that they don't put as much money into retirement accounts because they typically make less and more have part time jobs. What isn't initially clear is why their percent of pay is less than men. Like I said it comes down to the fact that they don't believe they are going to need as much than men believe they are going to need.
What can we learn from this? I would hope we can learn that it is very important to plan out your retirement. To really look at how much you are going to need and how much that means you are going to need to save today in order to achieve that retirement goal. We can guess and speculate but that doesn't get us anywhere. That typically leaves us with a smaller nest egg than we thought. There are so many variables to take into consideration that overestimating how much you are going to need is not a bad idea.
At Accuplan we want you to be able to have the best retirement that you can have. We want you to be able to invest in non traditional investments that most other custodians don't allow you to do with your IRA or 401k. Self directed IRAs and self directed 401Ks are available to you so that you can invest in other things with your retirement accounts. What types of investments can you investments can you invest in with your IRA and 401k? A few examples are gold, silver, real estate and even personal businesses. Take advantage of these great opportunities. We also are here to help you figure out what you need to save for retirement. It is wise to at least yearly check to make sure you need to save the same amount and that you are still on track. A great way to start figuring out your retirement is to read and follow these tips, Tips to Help You Retire Early.
Author: Nick Barker