Retirement should be a time to relax and enjoy the fruits of your labor. However, for women, retirement can be stressful due to the retirement gender gap. This gender gap in retirement savings is caused by several factors, including lower salaries and higher debt burdens that make saving difficult.
On average, women contribute 43% less to workplace retirement plans. This greatly impacts their savings and ultimately leads to less optimistic retirement prospects. Thankfully, financial expert Suze Orman has offered tips to help women improve their financial security in retirement.
1. Value who you are and what you’re worth
Suze Orman advises women to value themselves, their skills, and what they’re worth. For many women, the challenge of valuing themselves and standing tall for what they are worth is an ongoing battle.
According to Orman, It’s important to recognize that if you don’t value yourself and your worth, it will be difficult for others to see that value as well. To be paid what you are truly worth, you need to be confident and informed about your skills and what you bring to the table.
Orman encourages women to stand tall and be proud of their work and who they are. She states that women are not on sale and that they should not be afraid to advocate for their own value.
2. The retirement gender gap is not your fault
It’s also important to understand that the retirement gender gap is not any woman’s fault. It’s rooted in systemic issues like the gender pay gap, and the fact that women are more likely to take time off work to care for their families.
It’s easy to feel overwhelmed and think that you have to take on the burden of fixing everything on your own. Orman states that women are not alone, and there are many resources available to help bridge this gap.
Suze Orman advises women to stay informed, seek out financial advice, and make wise choices about the things that are within their control. Although you may not have caused the problem, how you choose to respond can make a big difference. By taking responsibility for what you can control, you can make progress towards resolving the issue at hand.
3. Say no out of love, not yes out of fear
Generosity is an important value, and many women find themselves taking care of elderly family members and loved ones. Suze Orman advises women to say no out of love, rather than yes out of fear.
This means setting boundaries and being clear about what you can and cannot do. This not only helps you manage your financial resources better, but it also helps you take care of your loved ones in a sustainable way.
If possible, it would be fair for the elderly parent or relative to contribute financially towards the costs of their care and the loss of income for the caregiver. Similarly, siblings should also step up and contribute financially if they are able to.
It may feel uncomfortable to ask for financial support, but it is necessary to secure your own retirement security. Avoid remaining silent on the issue to prevent added financial strain in the long run.
It’s also important to take a moment to pause and reflect when your child asks for something that requires a significant amount of money. Instead of immediately saying yes, ask yourself if you’re considering it out of the fear that your child’s love is contingent on giving them what they want.
While this thought may be common, it is incredibly damaging and wrong for everyone involved. Love should never be attached to money. If you say no to unnecessary big-ticket expenses out of love for your child, you’re not only setting the right money values for them, but you’re also giving yourself more money to save for retirement. By doing both, you’re demonstrating true love and respect for your child and yourself.
4. Take advantage of workplace retirement plans
Take advantage of your workplace retirement plans, such as a 401(k). Suze Orman advises women to contribute as much as possible to these plans because they offer significant tax benefits, and your employer will often give matching contributions. If a retirement plan isn’t offered by your employer, open an IRA of your own instead. Orman also advocates for having multiple retirement accounts.
By contributing consistently and taking advantage of an employer match, women can build a solid foundation for their retirement years. It is never too late to start planning for retirement and taking steps towards financial security in the future.
Orman states that women can take steps to narrow the gap by contributing more to their retirement savings. She advises women to contribute at least 10% to 15% of their income to their retirement plan.
Women can take charge of their retirement security by valuing who they are and what they’re worth and focusing on their financial security. Ultimately, by recognizing their worth and standing up for it, they will not only benefit themselves, but help to break down barriers that may prevent other women from getting the recognition, respect, and pay they deserve as well. Retirement security is something that everyone deserves, and with the right mindset and guidance, it’s achievable.
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