Did you know most women focus on their education, career, family, and housekeeping before they ever think about retirement?
If you go (or have gone) through life checking the boxes-
college ✔️
career ✔️
marriage ✔️
house ✔️
children✔️
saving for retirement
You will be in your mid-forties to mid-fifties before you get serious about retirement.
Suddenly, what seemed like something you should be doing (but needed the money elsewhere) causes a bit of a panic.
This can be exasperated if you decided to pay for your children’s college tuition before really saving for retirement.
It may be noble to help your kids start their professional careers with little or no student loan debt, but you will be placing a larger burden on them when you need their financial assistance as they are in the middle of raising their own families.
How do you make up for lost time?
Well, if you are just starting out, save 10-20% of your after tax income to use for investing. If your employer offers a match, contribute up to the match. Choose a fund with low fees. You can invest the rest on your own, whether with a government-recognized retirement plan or just earmarking those investments as your long-term plan. As you receive promotions and pay raises, try to keep your spending the same as it was and use the extra income to increase short-term savings, education, play, tithing/giving, and long-term investing (ie: retirement). You could also include a specific life goal, like a wedding, car, house, and/or vacations.
To set yourself up for success, check out the recommended income allocations at: https://www.howtobeamoneymaster.com/2019/02/08/how-to-allocate-your-income/
If you are in your 30s, you may already have some responsibilities, which could make earmarking funds for retirement a little more difficult. The good news is it is never too late to create new habits. If you are not already contributing to an employer-sponsored retirement plan, start (at least up to the match). Figure out which expenses are not completely necessary and use that money to fund your retirement account.
In your 40s, you are halfway through your working life. The good news is you may have already acquired some assets and perhaps even paid off your student debt. It may take a little more digging, but chances are you can make adjustments to find the funds to fund your retirement account. You may also want to consider investments that are not recognized as retirement accounts- rental real estate, annuities, whole life, stocks, etc- that could offer a better ROI and more flexibility than the traditional retirement account.
In your 50s you can still find a way to fund your retirement without giving up everything. Look at the strategies of your 40s and if it still seems like you do not have the money, think about a second job or selling some of the assets you have acquired. You may have to give up some of the activities or luxury items you have grown accustomed to, but are not necessary. It really comes down to which is more important- impressing the neighbors or being able to retire.
By your 60s you have almost run out of time, but there are still some actions you can take. In addition to the ideas mentioned above, you can downsize your home and/or downsize your lifestyle to save as much as possible. You will probably have to work past 67, but with your cost-cutting measures, you may find you can live comfortably on a shoestring. Depending on your relationships, you may be able to move into an in-law suite on one of your child’s homes or share a small house with a close friend (or friends).
Where are you in your journey? Are you on target to retire the way you want to?
We are discussing all this- and more- in the free 5-day Savings, Planning, and Retirement Knowledge (SPaRK) workshop, going on this week. Join us at www.facebook.com/groups/sparkworkshop to learn even more great ideas!