Women have made remarkable progress in the workplace over the past few decades. Currently, more women graduate from college than men; women also comprise more than half of the professional and technical workplace. However, women continue to face financial challenges.
Source: "Women in the Professional Workforce," Department for Professional Employees, AFL-CIO.
1 Labor Force Statistics from the Current Population Survey, February 26, 2014, bls.gov/cps/tables.htm
Women continue to earn less than men when working in comparable jobs. They're also more likely to work part time or interrupt their careers to care for family members. And women more frequently prioritize other goals, such as paying for college, over retirement savings.
Source: "Global Investor Pulse Survey," BlackRock. Highlights of Women's Earnings in 2012, U.S. Bureau of Labor Statistics, October 2013.
Women's retirement savings must be able to handle extra years of expenses and health care costs. When making retirement savings projections, take your potentially longer life span into account.
Source: U.S. Census tables, 2012.
2 LongTermCare.gov, Who Needs Care?, longtermcare.gov/the-basics/who-needs-care/
Combined, these factors mean that women still lag in one crucial area: retirement savings. On average, women have less saved in their retirement accounts than men. Factoring in the difference in average lifespan this can pose a problem. One way for women to make sure they don't fall behind is to make contributing to retirement plans a priority. Learn more about strategies for investing for retirement from Merrill Edge.
Sources: "The Gender Savings Gap," Bloomberg; "Life Expectancy," Social Security Administration; "Individual Retirement Account Balances, Contributions, and Rollovers, 2012," Employee Benefit Research Institute, May 2014.
If your company offers a match, try to contribute at least the minimum amount. Setting up automatic deductions from your paycheck to your 401(k) plan is a great way to make investing second nature. You can also set up automatic transfers from your bank account into an FDIC-insured deposit account IRA or a Merrill Edge investment account IRA. Women should start saving and investing as soon as possible—the earlier you begin saving and investing, the more time your nest egg has the potential to grow.
If you don't have access to a workplace retirement plan, there are other investment options. If you do not work outside the home but are married to someone who does, you may be able to contribute to a spousal IRA. Or if you're self-employed, consider a solo 401(k) or SEP-IRA. Learn more about your investment options at Merrill Edge.
To reach your financial goals, look out for unexpected opportunities to put more money toward your retirement account. If you get a bonus, tax refund or inheritance, contribute a portion to your retirement account. These "bonus" investments can help accelerate your overall investment rate.
While a conservative investment strategy minimizes some types of risk, it can backfire if your investment returns don't at least keep pace with inflation. Instead, invest in a manner that's appropriate within the context of your whole financial life. Of course there are also risks that come with that strategy. You can't be sure of earning a steady rate of return and you might even lose money, so make sure you understand the risks before you begin an investing plan. Visit Merrill Edge to learn more about developing an investment strategy that makes sense for your goals, time horizon and risk tolerance.
Source: "Leveling the Playing Field," Boston Consulting Group.
Women tend to be less confident than men about their financial skills. This isn't necessarily a bad thing; having a measured sense of your abilities may mean you're less likely to make rash or uninformed decisions. However, don't use that discomfort to detach. Remember, you gain confidence by keeping the conversation going and asking for answers that help you gain clarity. Empower yourself by learning more about women and retirement at MerrillEdge.com.