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Take Control of Your Future: Retirement Planning

By on April 1, 2022

Retirement planning often looks different for women than it does for men. Women have to account for factors that don’t typically influence men’s retirement plans, such as “lost” career years spent raising children and the additional years the average woman lives compared to her male counterpart.

Whether you’re single, married, raising a family, recently graduated or nearing retirement, don’t wait to take control of planning for your future.

Why Is Retirement Planning Different for Women?

There are several factors that play into why retirement planning is different between women and men.

  • Longer life spans: Statistics show that women typically live longer than men, which means their savings have to last longer.
  • Different life priorities: While not always the case, women often prioritize living expenses, family, debt and real estate over retirement savings.
  • The pay gap: Men tend to earn more money than women for doing the same job. In fact, research shows that American women earned just 84% of what men earned in 2020.

Despite these differences, there are things you can do to bridge the gap in your own finances.

How To Take Control of Your Retirement

While it may seem daunting, you can improve your financial literacy and build a solid retirement plan, no matter where you’re at in life.

1 – Empower Yourself With Financial Knowledge

The foundation of financial literacy is learning how to manage your money in a way that is most beneficial to you. Regardless of your marital status, the best way to secure your financial future is by making sure you’re involved in the financial planning process at every stage.

2 – Embrace Self-Employment and Passive Income Opportunities

Self-employment doesn’t necessarily mean owning a large business — it can refer to smaller ventures, too, such as a side hustle or a hobby you’ve learned to monetize.

You can also increase your earnings with passive income, which requires little effort to earn or maintain beyond the initial phase of work.

Examples of passive income include:

  • Rental properties
  • Dividend stocks
  • Digital file sales (printables or templates)
  • Stock photo sales
  • Cash back from rewards cards
  • Online course sales
  • E-book sales

Both self-employment and passive income can boost your retirement savings and give you more control over your schedule and finances.

3 – Plan for the Long Term

Planning for retirement requires you to look ahead and think about the big picture. This includes considering the cost of the care you may need later in life when calculating the amount of money you’ll need for a comfortable retirement.

“Along with longer lives comes the need for health care and long-term care,” says Aviva Pinto, managing director of Wealthspire Advisors.

“Long-term care needs to be budgeted for, or long-term care insurance needs to be purchased.”

4 – Learn To Negotiate

Negotiation can be one of your most valuable skills when it comes to earning what you’re worth and having the funds to prepare for retirement.

A 2016 study showed that 68 percent of women accept the salary they’re offered without negotiating, compared to 52 percent of men. The study also showed that the pay gap was greater for workers over the age of 55, supporting the idea that as people age in the workforce, men are more likely than women to negotiate their salary.

Follow these steps to learn how to negotiate:

  1. Do your research. Talk with recruiters, look at salary data for similar positions and search online to find the market value of your skills.
  2. Start at the top of your range. When proposing a specific number for a raise or starting salary, start at the top of the average range you found in your research. This gives you more room to negotiate down the line.
  3. Know your worth. It’s important to understand what you bring to the table and why it’s valuable to your current or future employer. Create a list of your relevant accomplishments and present them during negotiations.
  4. Practice with others. Ask a friend or family member to play the role of the employer as you practice making your case for a raise or promotion. This will help you become more familiar with the situation and build your confidence.
  5. Be kind, but firm. It’s always important to be kind and respectful, even if things don’t go your way.
  6. Prepare questions. Asking deliberate questions will help you understand the employer’s pain points and how you can be part of the solution.

5 – Open a Retirement Account

You can open your own retirement accounts at any time. If your employer doesn’t offer a retirement plan or you’re self-employed, you can set up a Roth or traditional IRA at your bank. You can also put your money in the stock market or in other investments.

Married couples also have the option of opening a spousal IRA to put extra money toward retirement. This is especially beneficial for families in which one spouse has little to no earned income — the working spouse can contribute funds to the account for the spouse who isn’t working.

6 – Automate Your Investments

Utilizing payment automation can help ease the temptation to spend your paycheck on other things while also getting you in the habit of saving. Plus, the sooner you begin and the more consistent you are, the more you’ll save in the long run.

“You can create a similar system [as workplace retirement plans] by having the money transferred out of your checking account into an IRA or a savings account as soon as you get paid,” says Laura Adams, a financial advisor for FreeAdvice.com.

“Even if they’re small, making consistent contributions goes a long way toward building financial safety nets.”

7 – Keep One Foot in the Workforce

While it’s not uncommon for women to step away from the workforce to focus on raising children, if you don’t maintain or develop your skill set during this time, it can be challenging to return to the labor force.

 


8 – Make Retirement Planning a Priority

There are so many places to spend your hard-earned money, but don’t let that stop you from planning for the future. While retirement may not be the most exciting thing to put your money toward, it will likely be the most rewarding in the end.

“The one thing that can set women up for success in retirement is to start today,” says Allyson Dennon, accredited financial counselor and owner of Fab Life Now. “Women tend to delay their financial moves due to a lack of knowledge or fear. The best advice I can give is to start now.

”No matter your age or life situation, making your retirement plan a priority is one of the best gifts you can give to your future self.

Avoid Retirement Planning Regrets

It’s easy to look back and wish you would have done something differently — don’t let planning for retirement be one of them.Here are a few common retirement planning regrets and tips on how to avoid them:

  • Not being involved in the planning process: Many women let their partner take the reins when it comes to finances, but it’s important to be involved in the process.
  • Not asking questions: Asking questions will give you a solid foundation in personal finance and will help you bolster your financial literacy.
  • Waiting to save until debt is completely paid off: While paying off debt is certainly important, it’s also possible to grow your retirement savings simultaneously. Work with a professional who can show you how to balance debt payments and retirement savings.

Understanding the unique challenges women face when it comes to planning for retirement and empowering yourself to change your own outcome can help you take control of your financial health, now and in the future.

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Samantha is a San Diego-based editor and writer. Her background in journalism and public relations has led her to cover unique topics ranging from timeshares to pet lifestyle to local news. When she’s not writing, you can find her walking her dog, baking cookies, or traveling.

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