Unfortunately, when it comes to retirement, women are generally behind. While many people were concerned about their retirement during the COVID-19 pandemic, women were roughly 10% more likely to be concerned about it compared to men, according to the National Institute on Retirement. If you’re concerned about retirement planning, don’t worry—you’re not alone. Continue reading for tips on saving for your golden years.
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How Much Will You Need?
There are a multitude of factors to consider when figuring out how much you’ll need for retirement. Consider the cost of living in your desired area, the age you plan to retire, and what your retirement lifestyle will look like.
Comparing your projected retirement income with the national or state average retirement income can be useful when determining if you’re headed in the right direction. While it won’t tell you exactly how much you specifically will need, it can give you a ballpark estimate for your retirement savings goals.
The U.S. Census Bureau data concludes that the median retirement income for retirees 65 and up is $47,357 per year. The median refers to the income that lies in the exact middle of all the different incomes earned around the country. However, women earn an average of $10,000 less than men after the age of 65 due to the wage gap, so retirement planning is especially important for women.
Consider Cost of Living
When figuring out how much you’ll need, you should consider where you plan to retire, as the cost of living can vary drastically by state. By taking a look at the states with the highest and lowest retirement incomes, you can more accurately gauge how much it might cost to live in each place, and how you can shift your retirement plan to afford where you want to live.
Track Your Progress
The pandemic showed many of us the grim realities of our financial situations. If you want to see where you are in your progress, do a quick check-up using a retirement calculator online.
Likewise, it’s always a good idea to meet with a trusted financial advisor regularly to make sure you’re on track to hitting your goals. While online calculators can give you a solid idea of where you’re at quickly, a financial advisor can help you figure out what needs changed or improved in your overall plan. A financial planner or investment advisor can also help you with these things.
Where Will Your Retirement Income Come From?
Many women have multiple sources of income post-retirement. You might get money from a pension, Social Security benefits, personal assets, or investments.
Try to diversify your portfolio to offset the risks of the market. Instead of just counting on a pension plan, consider contributing other investments. You can add money to other accounts like a 401(k) or IRA to ensure you’ll have enough for your retirement.
If you’d like to increase your retirement fund, consider working a little longer, or generating a stream of passive income. According to Schroders, 62% of Americans plan to continue working after the “normal” retirement age. As a retiree, you could earn passive income from renting a room in your home, writing an e-book, or creating an online course.
You should also consider ways you’ll protect your hard-earned money. By purchasing an annuity, you can protect your investments and receive guaranteed income for life. Likewise, investment accounts can help protect against inflation.
If you’re completely out of your bounds in finance, don’t delay talking with a financial professional. Talk to your family and friends for recommendations for advisors or ask what’s worked for them in their retirement planning. Doing so can help you feel prepared to tackle your own retirement planning.
To learn more about the average retirement income, look through the visual below.