Building your wealth and saving for retirement is such a prudent part of your life and career. Many individuals often times overlook the importance of starting early and learning ways to maximize their savings. While both men and women show a lack of financial literacy as it relates to their finances, we saw some research from the TIAA Institute that found that “women have 30% less retirement savings than men”, as well as research from AARP that found “that a quarter of women nearing retirement age don’t feel confident they’ll have enough money to support themselves”. We find this statistic shocking and a wake up call for employers and individuals to help spread and teach financial literacy to their employees. In fact, further research from the TIAA Institute Personal Finance Index found that “women have lower rates of financial literacy than men, which makes them more ‘financially fragile’. Individuals who are financially illiterate have great trouble making sound financial decisions that ultimately may lead to them derailing their financial plan and harming their financial future.
So, now that we know financial literacy is lacking in many women across the globe, what are some retirement tips and facts they should know? Well first and foremost, for those who may not know, a 401(K) is a retirement vehicle often available within your workplace that allows you to save a portion of your paycheck towards your retirement savings. It is a great way to set aside money each month and build your wealth. Starting early and often is something that we always share with prospects and clients, as time in the market is more beneficial than trying to time the market, as you can take advantage of letting your money compound for the long haul. Next, it’s important to analyze your risk tolerance. Given the extreme market volatility we’ve seen since the beginning of the year, we’ve noticed that many individuals are actually inaccurately allocated in their investments, which can cause anxiety for folks. If you are interested in learning what your risk tolerance is, email us at info@shermanwealth.com to take our customized risk tolerance questionnaire.
Some more about workplace 401(k)s, many companies offer a company match up to a certain percentage, which is essentially free money to take advantage of from your employer. Check out our blog for more information on why company matches are so crucial to take advantage of. Another great tip when it comes to your 401(K) and retirement savings is setting up automatic contributions. This way you are able to set aside the same amount of money per month, having it become automatic and consistent in nature. In conclusion, educating yourself on your workplace benefits, becoming financially literate about financial topics, and starting early on your retirement savings are all great ways to advance your financial future. If you have questions about your workplace benefits or how to maximize your retirement savings, email us at info@shermanwealth.com and we are happy to help.
