Achieving Retirement Savings Goals as a Woman: Best Practices and Strategies

Achieving Retirement Savings Goals as a Woman: Best Practices and Strategies

Do you want to save for your retirement and kickstart your savings, but don’t quite understand where to start? For many women, saving for retirement can be a daunting task – one made all the more difficult by the many unique challenges women face. From the gender pay gap to caregiving responsibilities to longer life expectancies, women around the U.S. often find it tricky to strive towards financial security and financial independence in retirement.

Saving for retirement doesn’t have to be tricky – or challenging. With the right guidance and empowering strategies, women can take control of their financial futures and achieve their retirement savings goals.

Below, we’ll dive into actionable advice and guidance for women on how to set and achieve their retirement savings goals. We will explore the challenges that women face and how to overcome them, including budgeting tips, investing, and taking advantage of employer-sponsored plans and individual retirement accounts. With our best practices and strategies, maximizing your retirement savings will be more than a distant dream – it will be a reality.

Understanding the challenges women face in saving for retirement

Saving for retirement is an ongoing challenge for thousands of people across the US. However, women tend to face unique challenges that make saving for retirement even more difficult. Let’s delve into the most common challenges women face. 

The gender pay gap: Impact on lifetime earnings and savings.

One of the biggest challenges women face when saving for retirement is the gender pay gap. Women earn less than men on average, which means they have lower lifetime earnings and savings. In fact, a report by the Government Accountability Office found that women over the age of 65 have a median income that is 25% lower than men’s median income. This pay gap can cost women millions in retirement savings. 

Handling career interruptions – and the impact of caregiving responsibilities

Caregiving can have a significant impact on women’s retirement savings. Caregiving can be for children or aging parents. Some women now also face being in the “sandwich generation” where they are caregiving both for children and parents at the same time! Studies have shown that caregiving can lead to lower income, less job security, and fewer opportunities for advancement. 

Unfortunately, many women are asked to be caregivers without any consideration for how it impacts their own financial or professional lives. Some options to minimize the impact of caregiving on retirement savings include flexible work arrangements, sharing caregiving responsibilities with family members, or seeking professional caregiving assistance. If you are in a partnership, have an honest conversation with your partner about how to equally share the impact of caregiving on your joint lives. Other ways to balance caregiving priorities are by seeking financial assistance or advice, prioritizing financial goals, and planning ahead for unexpected expenses.

Longer life expectancies and the importance of saving for increased longevity

Women tend to live longer than men, which means they need to save more for retirement to ensure their savings last throughout their lifetime. According to a study published by Carolyn Kitchings Johnson and Sharon Price-Bonham in the Journal of Gerontology, women’s retirement savings need to last at least five years longer than men’s retirement savings. CNBC reports that longevity can have a greater impact on retirement savings than inflation. 

Why traditional retirement advice might not work for many women

Let’s face it: Women’s financial situations can be more complex, and they may need a tailored approach to retirement planning. That’s perfectly okay! Women can – and should! – seek advice from financial professionals who understand their unique challenges and can offer customized solutions. Don’t fall prey to standardized retirement advice and standardized retirement savings goals by age on the Internet – tailor a plan to your own needs and goals! 

Setting achievable retirement savings goals

Importance of goal-setting: How to set realistic and achievable goals

Have you ever set outlandish savings goals…Then felt disappointed when you failed to meet them? As tempting as it may be to set ambitious goals, it is far more realistic to set achievable goals you can actually meet. Realistic goals help to maintain focus, increase motivation, and provide a sense of direction. To set achievable goals, start by identifying your priorities and determining the amount of money you will need to retire comfortably. 

Calculating retirement savings needs

It’s one of the most common questions we get: How much money do you actually need to retire? The answer is complicated. Your retirement savings needs should factor in your expenses, any major changes to your budget, healthcare spending, your expected retirement age, and more. If you’re struggling, consider working with a professional who can help take a holistic view of your finances and go from there. 

Creating a savings plan: Strategies for saving more, spending less, and investing wisely

To ensure you are saving enough for retirement, you must have a solid savings plan in place. There are many levers you can pull to achieve your financial goals.  Strategies like saving more, spending less, and investing wisely can help you increase your savings and boost your financial resilience.  Working with a financial advisor can help you understand your specific goals for retirement and how to best reach them given your unique values and resources. 

Tracking progress and adjusting goals

Don’t just set it and forget it. It’s important to monitor your progress regularly and adjust your goals as needed. Tracking your progress helps you stay on track and make changes to your savings plan when necessary.  Also, when you track the progress you are making it is much easier to stay motivated to stick to your plan because you can see and celebrate your achievements!

Balancing competing financial priorities

Managing your finances can be a challenging task, especially when you have competing financial priorities. Balancing these priorities requires careful planning and prioritization. 

Managing debt: Strategies for reducing debt and freeing up funds for retirement savings

If you’ve been reading this article and thinking about your debt, don’t worry: you’re not alone! Debt is a significant barrier to achieving financial goals for both men and women, especially when it comes to retirement savings. To reduce debt and free up funds for retirement savings, you must have a debt management plan. Strategies like consolidating debts, reducing interest rates, and developing a repayment plan can help improve your situation. Likewise, working with a financial advisor who can help assess your situation as a whole may help as well.

Taking advantage of employer-sponsored plans

Does your employer-sponsored retirement plan offer you an opportunity to maximize your retirement savings? Employer-sponsored retirement plans like 401(k) and 403(b) offer employees an opportunity to save for retirement while taking advantage of tax benefits and employer contributions. To maximize contributions and benefits, you should contribute the maximum allowed by law and consider employer-matching contributions – this is essential! 

Managing Individual Retirement Accounts (IRAs)

IRAs offer individuals another option for retirement savings – with different types and contribution limits. To maximize savings, consider contributing the maximum allowed by law and taking advantage of catch-up contributions if you are over 50. If you’re not sure how to maximize your IRA contributions, working with a financial advisor can help you understand which direction you should be taking. 

Investment strategies for retirement 

Investing can be an effective way to build wealth and save for retirement – but many women feel intimidated by investing and might not know where to start. However, investing also comes with its own risks that women should consider and weigh. Strategies like diversification, asset allocation, and risk management can help you minimize risk and achieve your investment goals. If investing feels like a difficult bridge to cross, consider speaking with a professional to get help. 

Balancing competing financial priorities

Unless you’re independently wealthy with an unlimited source of funds, balancing competing financial priorities is essential to achieve your financial goals as a woman. Careful planning, prioritization, and budgeting can help you manage expenses like education and healthcare costs while saving for retirement. 

Key Takeaways

Practical strategies, awareness, and a positive mindset all play an important part when working towards your retirement savings goals. Women, above all else, should be aware of the unique challenges they may face, such as lower salaries and longer life expectancies – and adjust their savings plan accordingly. Remember, it’s never too late or too early to start saving for retirement. Don’t be afraid to take control of your financial future!

Joanna Amberger

Download Your
FREE eBook