In my article, “Women: the wealth gap, wage gap, and retirement,” I touch on just a few things that make retiring for women difficult. It is important to understand the challenges for saving as a woman in order to understand the solution: investing.
In many households, women default to letting their money be handled by their significant others. According to CNBC, women tend to leave monetary decisions up to their spouses, which could potentially set them back financially (CNBC). Younger women, women in their 20’s and 30’s, are more likely to do so than older women. And yet, investing when you are young is the most important time.
It is daunting to think of how you can start saving for retirement when you are fresh out of college. However, by understanding the importance of saving and investing, women can begin to make the right decisions for themselves earlier on.
What can individuals do to close the gap?
Advocate for pay transparency. No matter what your level in an organization, you can advocate for clear pay guidelines. Companies are starting to understand the negative impacts associated with pay disparities. By asking for transparency, and taking steps to implement this kind of company culture, you can make strides in helping close the gap.
Educate. Many women don’t know or understand how these gaps, and how being a woman in general, impact retirement. Education includes both women and men. In order to fight the wage and wealth gaps, men also need to be aware of the issues and take action.
Invest. The most effective way to combat gaps like the ones we’ve been discussing is to invest. Statistics show that women are much more risk averse than men, fueling their lack of investing. Though there is a risk in investing in the market, there are also huge downsides to holding onto cash. A recent survey by Fidelity saw only 29% of women saying that they saw themselves as investors, while another popular site for financial advisors states that only 26% of American women invest in the stock market. There are many statistics showing that women earn less, so just saving is not enough. Investing is the largest, most important action women can take to close the gap.
Be open! According to Ellevest, 61% of women would rather talk about their own death than talk about money. Personally, money hasn’t been the most exciting topic in my home. Retirement has been a difficult topic of conversation for both my parents. So, when it came to discussing personal finance and its importance, there wasn’t one. And that was because they lacked the knowledge themselves. Money should not be a scary thing to talk about. Addressing what you don’t know is more than half the battle. It’s so important to start being open and talking about finances in order to maximize what you have.
Comments