Whether retirement is decades away or just around the corner, saving for your work-free years may not be at the top of your mind while you’re going through your nine-to-five — especially, a new report shows, if you’re a woman.
According to Bank of America Merrill Lynch’s annual Workplace Benefits Report, a whopping 71 percent of women are worried about retirement, compared to 58 percent of men. What’s more, 61 percent of women believe they will have to work longer than they’d planned to make ends meet, while just 51 percent of men feel the same. “Female employees also contribute less to their 401(k) and have $119,000 in investable assets on average, compared to $196,000 for men,” the report says.
Leanne Jacobs, financial wellness expert and author of Beautiful Money, says any number of factors could contribute to why women are saving less for retirement, from the gender wage gap to lost wages if a woman choose to stay at home to raise her kids. Jacobs explains, “Women also tend to invest less than men do and for some, worry more about the stock market and feel less confident than [men] investing and managing their money.”
The good news is that any woman can find better financial footing and start saving for retirement ASAP. Here are simple steps you can take today.
1. Calculate your net worth.
“Women are often nervous to take a high-level snapshot of their money,” Jacobs says. “They fear that their debt just might be overwhelming, so they often avoid calculating net worth.” But Jacobs says knowing your net worth—what you have in assets after subtracting your debts—is “the fastest way to make subtle shifts to accelerate savings and financial growth.” After all, Jacobs points out, you may have more money to invest than you think you do. And if you don’t, knowing your starting point can push you in the direction of paying down debt.
While you can work with a financial professional, it’s easy enough to crunch these numbers on your own: total up your assets (hings such as your investments, home or car you own, and anything else that you could turn into cash) and your liabilities (credit card debt, school loans, car payments, and other debts). Then, subtract your liabilities from your assets. That number is your net worth. According to Jacobs, now that you have that number, no matter how high or low or even upsetting that it may be, “it gives you a starting point to grow from and helps to create a loving sense of urgency for growing that number now.”
2. Know your credit score.
Another number you need to know before you start saving is your credit score. Why? That number is like a grade, Jacobs explains, that you can work to improve. “Doing your score at least once a year will help you clearly understand and measure the progress you’ve made,” she says. “It will also help you create better habits, like paying your bills on time, and make you a better money manager.” (And with that confidence, you may find it easier to invest your money for retirement.) Some banks and credit card companies now include a free credit score estimate as part of their services. You can also request a credit score once a year from Equifax, Experian and TransUnion, by using the website Annual Credit Report.
3. Automate your savings.
Now that you have a clearer picture of your financial situation, it’s time to start saving for retirement. But here’s the thing: if you have to think about doing it, chances are you won’t.
Jacobs suggests automating your savings to ease your retirement worries. If your company offers a 401(k), you can ask that a certain amount—usually, a percentage of your paycheck—be directly deposited into an account of your choice. If it doesn’t offer a 401(k), work with a bank to set up an IRA or a Roth IRA, and schedule a monthly direct deposit from your checking account into that one.
“Even if you start small, you will see your wealth account grow each week which will create the power and momentum you need to want to save even more,” encourages Jacobs.
4. Think creatively.
If you’ve done everything above and you still feel like you’re not saving enough, Jacobs says, you may want to look for ways to add income to increase your savings. While you may not be able to take on another job, she suggests asking yourself, “What skills, passions, or hobbies do you have that can [make money] on a few hours a week? We have more down time than we think, and if we look at that time as [money making] opportunity time, the sky’s the limit.”
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 5.87%1||Undergrad & Graduate|
|2.47% – 8.03%4||Undergrad & Graduate|
|2.95% – 6.37%2||Undergrad & Graduate|
|2.48% – 6.25%5||Undergrad & Graduate|
|2.72% – 8.32%6||Undergrad & Graduate|