Yahoo Finanza Experts: How Much Women Should Invest In Their Retirement in 2024
Women are putting less of their income toward retirement savings than men, a recent GOBankingRates survey found. According to the survey, 42% of women aren’t saving anything for retirement versus 35% of men. In addition, less than a third of women (29%) are putting 10% or more of their income toward retirement savings, while 33% of men are saving 10% or more.
In this “Financially Savvy Female” column, we’re chatting with experts about how much should women be investing toward retirement in 2024, and how can they get started if they never have before.
Check Out: Americans Don’t Put Enough Toward Retirement: Experts Say This Is the Magic Number
Read Next: One Smart Way To Grow Your Retirement Savings in 2024
Sponsored: Credit card debt keeping you up at night? Find out if you can reduce your debt with these 3 steps
Aim For 10% to 15% of Your Salary
As a general rule of thumb, financial experts recommend contributing 10% to 15% of your income to retirement savings.
“If you’re aiming for a 15% savings rate, your employer may already be contributing up to 5%, which means you only need to save 10%,” said Kris Carroll, CFA, CFP, managing director of the Carolinas at Wealth Enhancement Group.
“Saving 10% of your salary can sound like a lot, especially in the early years when your salary may be lower, or during the child-rearing years when it seems like you’ll never have enough,” he continued. “One way to achieve this is to start saving early and gradually increase your savings rate over time.”
Chris Urban, CFP and founder of Discovery Wealth Planning, recommends saving between 10% and 30% of your salary.
“Of course, everyone’s lifestyle, living expenses and family situation are different,” he said, “so it’s important to keep that in mind as you consider which end of the range you are on.”
Currently, less than 3% of women are contributing more than 20% of their income to retirement savings, the GOBankingRates survey found.
Discover More: How To Retire on $2,000 a Month: A Frugal Living Guide
Getting Started
The best way to build your retirement savings is to automate the process.
“Set up automatic transfers to your retirement accounts to ensure consistent savings,” said Taylor Kovar, CFP, CEO and founder of Kovar Wealth Management.
If you feel like you aren’t financially able to contribute to your retirement savings, it may be time to get creative. Caitlynn Eldridge, CPA, founder and CEO at Eldridge CPA LLC, offered a few tips for freeing up money to contribute to retirement savings.
“(1) Ask for a raise at work and use that extra to put into retirement,” she said. “(2) Optimize all appropriate pretax benefits at work so that there is more cash to put into pretax 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.”
Even if you can’t contribute the recommended 10% to 15% just yet, work up to this over time.
“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.
Survey methodology: GOBankingRates surveyed 1,005 Americans ages 18 and older from across the country between Jan. 23 and Jan. 26, 2024, asking six questions: (1) What is more important to you in a job/career?; (2) What is the minimum annual salary that would make you feel happy?; (3) How much do you believe you will need in savings to retire comfortably?; (4) How much do you currently have saved for retirement?; (5) Do you think you will be able and prepared to retire at 65?; and (6) What percentage of your salary do you put toward a retirement plan, such as a 401(k)? GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
More From GOBankingRates
This is One of the Best Ways to Boost Your Retirement Savings in 2024
6 Things You Should Never Do With Your Tax Refund (Do This Instead)
This article originally appeared on GOBankingRates.com: Experts: How Much Women Should Invest In Their Retirement in 2024
