Yahoo Finance Nearly One-Third of Women Have No Retirement Savings: How They Can Catch Up
According to a recent GOBankingRates survey, women are more likely than men to have nothing saved for retirement — the survey found that 30% of women have no retirement savings versus 26% of men. It also found that an additional 23% of women have $10,000 or less saved for retirement.
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In this “Financially Savvy Female” column, we’re chatting with financial experts about how women can catch up on their retirement savings — and even get ahead so they’re well prepared for the future.
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Automate Retirement Contributions
“Set up automatic transfers to your retirement accounts to ensure consistent savings,” said Taylor Kovar, CFP, CEO and founder of Kovar Wealth Management.
This is easy to do if you have a workplace retirement account, but you can also set up automatic transfers to an IRA as well.
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Bump Up Your Contributions
Ideally, you should contribute the maximum amount to your retirement savings plans, but if you are not able to, focus on increasing contributions incrementally.
“Women should try increasing the contribution by 1% to 2% each January or each time they get a pay raise,” said Mary Ballin, CFP, CDFA, wealth advisor at Perigon Wealth Management.
Take Advantage of Catch-Up Contributions
“Take advantage of catch-up contributions if you are over 50, which allow you to contribute additional funds beyond the standard limits,” Kovar said.
For 2024, the IRA catch-up contribution limit is $1,000 and for employer-sponsored plans, it’s $7,500.
Look For Ways To Free Up Money To Save More for Retirement
If you aren’t currently able to increase retirement contributions within your budget, it may be time to look for ways to free up more funds. One way to do this is to focus on paying down high-interest debt.
“Reducing high-interest debt can significantly improve your ability to save,” Kovar said.
Caitlynn Eldridge, CPA, founder and CEO at Eldridge CPA LLC, offered a few other recommendations for getting more money to contribute to retirement savings:
“(1) Ask for a raise at work and use that extra to put into retirement. (2) Optimize all appropriate pre-tax benefits at work so that there is more cash to put into pre-tax retirement. (3) Find small amounts to set into a retirement fund. [For example], is there some convenience you pay for, like delivery that costs $20 a week? Instead of delivery, direct that money toward your retirement. While it’s small, compound interest helps it to add up over time.”
Review Your Investment Portfolio Regularly
“While it’s important to be cautious, being too conservative can limit growth,” Kovar said. “Balancing risk and potential returns is key, especially if you’re playing catch-up.”
One way to ensure you have an adequate level of risk is to make sure your portfolio is well diversified.
“Diversification can help manage risk,” Kovar said. “Consider a mix of stocks, bonds and other assets tailored to your risk tolerance and time horizon.”
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This article originally appeared on GOBankingRates.com: Nearly One-Third of Women Have No Retirement Savings: How They Can Catch Up
