A survey by Prudential Financial revealed that saving for retirement is among American females’ top three financial worries. In fact, the study revealed that while women are relatively confident about achieving their financial goals (buying a house, reducing debt, etc.), they are significantly less confident about having enough money to maintain a comfortable lifestyle when they retire.
Have you even started planning for retirement? If not, you’re not alone: both women under 35 and baby-boomer women reported feeling “way behind” when it came to retirement readiness and planning.
Not these ladies. In the third installment of our Women’s Wealth Building series, we turned to some of our favorite financially fit females and asked:
What’s your approach to retirement planning?
Elizabeth Lang, Women’s Money Week
My approach to retirement is this: Save Early, Save Often, Save Strategically. I first started saving for retirement at the age of 21 when I graduated from college by using my employer’s 403(b) plan. Contributions were taken from my biweekly paycheck. Even if you didn’t start saving early, making regular contributions is key to the numbers add up. Finally, saving strategically means that you need to find the right plan for you whether it’s a Roth IRA, 401(k) with an employer’s match, or something else.
Andrea Amir, Smart Money Chicks
Most women are unclear when it comes to the amount of money they even need to save for their retirement. The rule of thumb is about 75-80% of your income. So if your yearly salary now is $48,000 you would need at least $36,000 yearly. One of my favorite tools, which is often eye-opening to most women, is The Social Security Benefits Estimator. This will give you an idea of how much you may receive which better prepares you for the future.
Kay Bell, Don’t Mess with Taxes
Saving for retirement is critical — and difficult — for the self-employed individual. Like all solopreneurs, I must budget carefully. So I’ve added a self-employed retirement account contribution (I have a SEP IRA but there are many plan options) to my budget every quarter, right there with my estimated tax payment line item. I know it’s a coming expense, so I’m prepared to pay my future retired self along with all my other expenses.
Donna Freedman, MSN Money’s Frugal Nation
While I do have a 401(k) from my previous life in newspapers, I was able to fund it for only 11 years. My Social Security situation won’t be stellar, either: I worked irregularly or part-time until age 26 and full-time for only 19 years after that. Now I’m playing catch-up by assuming I can never retire, but planning as though it could happen next week — that is, I save and invest as much as possible and look for ways to enjoy life both frugally and fully. My advice to younger workers: Take advantage of compound interest (wish I had!), educate yourself about personal finance and use frugal hacks to live the best life you can without going into debt to achieve it.
What’s your approach to retirement planning? Sound off in the comments!