Over the past 50 years, we’ve seen crazy leaps and bounds of improvements in lots of things. We’ve gone from the typewriter to the iPad, the vinyl record to the mp3, the black & white tube TV to the 65” high definition LCD flat panel…complete with surround sound.
Unfortunately some things just haven’t evolved at the same pace –– including the average woman’s income. Despite all the progress made over the past few decades, there’s still a gap between women and men when it comes to earning money.
What this means in a larger sense is, as a woman, you may be starting behind the 8 Ball when it comes to saving for retirement.
We’re not here to get into a discussion of why the average woman doesn’t earn as much as the average man. As they say, it is what it is…at least for now. *
So, women have to buckle down and work with what we have – and make sure we’re covered, income-wise, over the course of our retirement years. Once you figure out how much you need to save to set yourself up to receive a steady income in retirement (here’s a helpful retirement calculator to get you started), here are a couple of out-of-the-box planning strategies to think about to avoid potential gaps.
Remember, Starbucks doesn’t discount their macchiatos 30% for women. Banks don’t lower their interest rates when a woman applies for a loan. Your retirement account won’t grow by leaps and bounds…unless you feed it. Women simply have to proactively secure themselves financially to thrive in retirement.
Regardless of your income, you should focus on building your wealth so you’re not left scrambling with how to close the gap during retirement (not to be confused with…clothes at the GAP!).
*The news isn’t all bad. Gen-Y women are making a dent in leveling the playing field. In some major metropolitan areas, younger women have jumped to an 8% income lead over men in the same age group. A key factor to this increase may be that these women are mostly single and childless – factors that are likely to change in their thirties.
This 8% bump in income for our Gen-Y sisters, though, is hardly enough to declare victory on closing the Gap. The Gap starts to widen later in life –– even for middle-class and affluent women. According to the Census Bureau, almost 20% of unmarried women age 65 were living in poverty. This percentage is most likely to increase as the markets continue to freefall. A study done by the Transamerica Center for Retirement Studies showed that nearly 74% of the women surveyed agreed that they needed to know more about retirement investing.
Cathy DeWitt Dunn, President of DeWitt & Dunn, LLC, is the driving force behind Women Money & Power. With decades of experience in the financial services industry, Cathy specializes in helping individuals and families strengthen their retirement outlook with lifetime income solutions not available from traditional brokerage houses. She has helped countless investors start their personal journeys towards a stronger retirement with strategies designed to protect principal, generate retirement income that can’t be outlived, and eliminate market loss.