You might have heard the expression “retirement gap” in regards to gender. It means that women generally retire with less money than men. However, women tend to live longer than men by 6-8 years.
That means many women need to be proactive about trying to close the retirement gap during their working years. We have some suggestions for how to do this.
1. Consolidate Your Credit Card Debt
If you have debt on multiple credit cards you’re not able to pay off during a single payment period, you might consider taking out a loan to consolidate that debt. You want to start saving for retirement sooner rather than later, and you can’t very well do that if you’re saddled with high-interest credit card debt.
A consolidation loan is a fixed-interest loan you get from a lending entity like a bank or credit union. You use that to pay off all your credit card debt or other high-interest debt. Once you’ve done that, you’ll have a set payment and a set time to pay it each month. You’ll also probably secure a lower interest rate than you were paying on your credit cards.
Start by collecting quotes from various lenders willing to give you a consolidation loan. Then, use a loan consolidation calculator to see which offer makes the most sense.
If you do this, you can better manage your debt, and you’ll be in much better shape to start saving for retirement.
2. Prioritize Retirement Over a Child’s Education
It’s great for women to put away money for their child’s higher education, starting when they’re very young. Ideally, you can do that while putting money toward your eventual retirement at the same time.
However, that might not be realistic. If you’re paying rent or mortgage, utility bills, car payments, and then trying to save for your child’s college and your retirement, you might be overextending yourself.
Saving for retirement should be your priority, and saving for your child’s education should come second, according to many financial experts. That might sound selfish, but if you don’t have retirement savings when the time comes, they’ll be the ones having to take care of you.
3. Get Creative with Aging Parent Care
As your parents age, you know you’ll probably have to care for them. That might involve paying a home health aide to check in on them a few times per week. You might also pay to put them in a nursing home or assisted living facility.
You would hope their retirement savings can cover that, but what if their money runs out? If so, you may feel obligated to lend a hand financially.
Consider having them move in with you or stopping by their house to check on them yourself if you live in the same city. That will save you money you can put toward your retirement instead.
Closing the Retirement Gap is Possible
The fact that a gender-based retirement gap exists is problematic, but women can take concrete steps to plan for retirement during their working lives and close that gap. In order to do so, it’s critical to prioritize retirement savings over other expenses. You might also consolidate credit card debt with a consolidation loan to put yourself in a better position to start saving for retirement.
These actions combined can get you on the right path toward a comfortable retirement when the time comes.
