Women and Retirement: Why You Need To Take Control Now

Why Women Have Less Saved

Women are just as capable of handling their personal finances, planning for retirement, and saving. So why do so many women not have enough saved for their futures? Historically, it’s been harder for women to save for retirement for a number of reasons.

• Historical legal barriers: There were several legal barriers preventing women from fully participating in the economy and gaining credit until the Equal Credit Opportunity Act was passed in 1974 – just 52 years ago. Until the ECOA, women’s applications for a credit card or loan could be denied without a male co-signer, such as her father or husband.
• Stepping away from the workforce: Stay at home parents face significant challenges if they attempt to reenter the workforce after a long gap. A parent staying at home to care for a child from birth-18 years old will not have the 18 years of work experience, pay raises, educational opportunities, networking opportunities, and 401(k) contributions that their peers who did not stay at home had, regardless of gender. Take into account that 80% of stay-at-home-parents in the United States are women and you can see why this would have a noticeable impact on women’s retirement savings.
• Longer life expectancy: Women live, on average, 5 years longer than men. That’s 5 more years of housing costs, medical needs, and caregiving on top of regular cost of living expenses like utilities, groceries, and transportation.

There have been incredible strides made since the passing of the ECOA, and women are taking full advantage of them. Yet still women, on average, have less saved for their retirement.

 

What Women Can (and Need To) Do About It

The wonderful news is that access to financial wellness resources is more abundant than ever. The tools and information women need to reduce their financial stress and save more money for retirement exist, and often at very little or even no cost. Here are a couple of steps you can take to make sure you’re maximizing your retirement savings opportunities and feel a little more confident about your financial stability.

1. You can have a retirement account even if your employer doesn’t offer one. 401(k)s aren’t the only retirement accounts. You can set up an Individual Retirement Arrangement (IRA) to fund your future retirement.
2. Start saving ASAP, even if it’s a small amount. Because of both compounding interest your money will go farther if you start investing early, even if it’s just a small amount.
3. Keep track of Social Security earnings. The Social Security Administration has free tools you can use to keep track of your potential retirement benefits, including estimates based on starting benefits at different ages. This is crucial to understanding what your future budget might look like.
4. Use all of the resources available to you. Many of us haven’t had the opportunity to learn the skills needed for true financial wellness, but support is available. Jeanne D’Arc partners with GreenPath Financial Wellness to offer members free one-on-one counseling, while our own Financial Wellness Team provides workshops, personal coaching, and additional resources. Explore all the ways we can help you achieve your financial goals on our website.