Have you heard of the gender wealth gap in retirement? As a women, find out how to get the comfortable “golden years” that you are looking for after a career filled with many long days and stressful moments.
When it’s time to retire
Your retirement should be a happy milestone. You’ve worked hard for years to save up money and should get to enjoy post-retirement life. Unfortunately, women are at a disadvantage to men when it comes to retirement savings, so they’re less likely to get the comfy retirement they deserve and have earned.
What is the gender wealth gap in retirement, anyway?
This gap in retirement savings between men and women is known as the retirement gender wealth gap. A recent report from the National Institute for Retirement Security (NIRS) had a number of findings that shed light on this gap. In 2016 retirement-aged women’s annual income was 83% of comparable men.
- $47,244: Women’s (65+ years old) median household income in 2016
- $57,144: Men’s (65+ years old) median household income in 2016
Why does it matter?
Factors that contribute to the gap include women spending more time on caregiving responsibilities, divorce and the pay gap between women and men.
When women retire with less money than men, they have less money for enjoying the rest of their lives, as well for paying their medical bills. Since women live longer than men on average, they are more likely to be widowed and have to make their smaller retirement savings last longer.
3 ways you can boost your wealth
You can take steps to overcome the retirement gender wealth gap and prepare for retirement by bolstering your savings. Here are three ways you can boost your wealth:
1. Make a budget
Making a detailed budget – and sticking to it – can give you control over your finances. A budget can help you pay off debt, which is important to do because interest that steadily piles up can quickly drain your savings. With an organized budget, you can also determine where to cut expenses.
2. Build your credit
A good credit score can give you access to better interest rates on loans, lower insurance premiums and more negotiating power. Additionally, paying off your credit card balance each month can save you extra money if you have a rewards credit card.
3. Take on investments
Financial experts will recommend that people invest and invest early. When you’re just starting out, you can be more aggressive with your investments and as you approach retirement, your investments should be more steady and less risky. Getting help from a financial advisor would be a great choice, if you aren’t as confident in investing on your own.
More on investing to reduce the gender wealth gap in retirement
Aside from traditional investments, property investments are one of the most frequently mentioned ways to build wealth. Houses are appreciating assets, meaning they’ll increase in value over time. That means you can build wealth simply by being patient and watching the housing market trends.
Take advantage of low-interest mortgage rates
To maximize your return on investment when it comes to buying and selling homes, you can take advantage of low-interest mortgage rates. Due to the COVID-19 pandemic, mortgage rates are hitting record lows, making it a great time to purchase your first home or investment property. Low mortgage rates can give you more buying power so that you can make the most of your property investment.
However, don’t rush into purchasing a house. Buying a home is a complex process, and it’s well worth taking the time to get the best value on your purchase.
Conducting thorough research and engaging in strong negotiation can help you secure a great deal. It can also improve your wealth accumulation so that you’re not struggling for financial security when retirement rolls around.