Many Women Have No Retirement Savings Goal: Why You Need One (and How To Achieve It)
A new GOBankingRates survey found that 38% of women have no retirement savings goal versus 24% of men. It also found that 22% of women are planning to save $500,000 or less for retirement.
In this “Financially Savvy Female” column, we’re chatting with Vanessa Martinez, CEO of Expressive Wealth, about why women should have a retirement savings goal, what that number should be and how to get there.
Why is it so vital for women to set a goal for their retirement savings, and how can they come up with this number?
I think it’s most important to set a plan. Instead of just putting a number in your mind, it’s more important to have tangible goals that can be achieved by saving and investing. The reason why I think women [lack a retirement savings goal] is more so the lack of understanding of how important it is — not necessarily what it is.
We need to focus on [asking ourselves], ‘What do I need to do today to reach the long-term vision?’ You need to break it down, so you need to kind of go backward. [Ask yourself], what steps do you need to take to get there and how long does each one take? Even if that means you have to start saving $100 a week, $200 a month, whatever your number is based on your plan, it’s taking those small steps.
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The only way you can set a number is by knowing what your vision is. What is that vision that you’re trying to reach? It’s first establishing what you want, and that could be different for every single person. There is no one-size-fits-all, specifically for retirement savings.
If you’re thinking about those pieces [that go into your retirement savings goal], healthcare is important. How do you want your healthcare to be? Are there medical conditions that run in your family? You can do projections. [Another piece is] Social Security. Will you have it? What are your numbers? Estate planning and the risk of longevity — because women live longer — [are also important pieces]. You have to take into account all these pieces to be able to establish, OK, this is a number I need.
Will $500,000 be sufficient retirement savings for most women? Why or why not?
Can it work? Of course it can, because we’ve seen multiple people live off that — even taking into account inflation — but obviously it’s a more frugal lifestyle. Are you willing to do that? Is that what you want?
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What steps can women take to achieve their retirement savings goal, particularly if they are already “behind”?
Nobody likes to talk about the budget because you always feel like you’re restricting yourself on things. But if you truly build one that fits what you want, [you can stick with it]. Let’s say you are a little behind — then, give yourself a few pleasures along the way. You could say, this year I’m going to save a little more and be a little tighter, but I know that next year I already have this trip booked. We need the ups and downs. If we have to consistently be frugal — never drinking Starbucks, never going to the store — it doesn’t work.
If you are behind, there are different things [you can do] like [make] catch-up [contributions] to your 401(k) or IRA if you’re over 50. That just means [budgeting] less on other things and more on your retirement buckets. Make sure that you do maximize those contributions to the 401(k) and still contribute to an IRA or a Roth, depending on your income limit.
This is a priority and you need to focus on it. Spend some time reviewing your bank account, look through your transactions and build out your budget. No one’s going to say this is easy. But is it worth it? 1,000%.
Survey methodology: GOBankingRates surveyed 1,395 Americans ages 18 and older from across the country between February 26 and February 28, 2024, asking 12 different questions: (1) Do you have a specific retirement savings goal?; (2) Will you need to work part-time in retirement?; (3) In retirement, what type of housing/living situation would/do you prefer?; (4) How important is/was proximity to family and friends in choosing a location to retire?; (5) Are you considering downsizing in retirement?; (6) Do you plan to or did you move for your retirement?; (7) Where is your ideal location for retirement?; (8) Which of the following will you/did you consider when deciding where to live in retirement? (Select all that apply); (9) What is the MOST important factor in deciding where you want to retire?; (10) What are you looking forward to in retirement?; (11) How much do you plan to spend monthly in retirement (outside of housing/rent)?; and (12) Which of the following countries would you be most interested in spending your retirement? GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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This article originally appeared on GOBankingRates.com: Many Women Have No Retirement Savings Goal: Why You Need One (and How To Achieve It)
