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| How would you like to be this woman at age 65? |
I am a single 40 something woman. I am no stock expert - I am probably just like you: muddling through my 40+ hour work week. Money is probably tight: we're women, we are raising kids, or helping our adult kids make ends meet, helping our aging parents etc.
Life is HARD, money is TIGHT!
We are all extremely busy with work and family obligations. On top of all of that we are trying to have social lives; attempting to dress well and maintain our appearance! This is expensive.
Who even thinks about that thing way Way WAY off on the far Far FAR distant time that is called retirement???
Though I can hardly believe that day may come for me, I think about how I will pay my bills once I am old A LOT! I watched my mother struggle to support herself on social security alone. No savings, no pension, no nothing. She was never a saver. If she had a nickel she spent a dime. She must have assumed, as many people do, that she retirement would somehow sort itself out once she got there.
And it did. She was stressed for cash and always broke. I helped her out financially when I was able. But it was never enough.
If fact, according to the Center for American Progress,
"Currently, 3.4 million seniors age 65 and older live below the poverty line. Millions more are barely making ends meet just above the poverty line. While 9.4 percent of seniors had incomes in 2006 below the poverty threshold of $9,669 for an individual, and $12,186 for a couple, nearly a quarter of older Americans (22.4 percent) had family incomes below 150 percent of the poverty line."
This is what has turned me into a determined retirement saver. Due to raising children, I entered the workforce late in life, at 27. I didn't start my 401k until I was 30, and then I was only able to contribute 2%.
A couple years later, by about age 32, I was able to contribute 15% for the next 6 years. A good amount of money. But either because the markets did poorly, ( 2008 great recession ), or because I am a cautious investor, or because my LATE start, my retirement provider says that I am OFF track for retirement nest egg based on my age.
It didn't help that I stopped contributing to my 401k at all for about 2 years. To qualify for my house I had to bump my net income as much as possible. And after watching the markets crash I was just so discouraged about losing my hard earned money that I simply sat back and waited. As soon as I closed on the house I should have resumed my contributions.
Back to today. My goal is to become "on track". I resumed my 401k contributions 2 years after I bought my home. I am currently at 11%, and bumping it up to 15% this month. My 401k is invested in the moderate plan. I've seen too many bubbles in the market, followed by too many crashes to ever gamble my nest egg in an aggressive plan. Stupid? Maybe. But time will tell.
I wouldn't blame anyone for being too scared to be aggressive with their retirement nest egg.I think the truly stupid thing to do is to either make no attempt at acquiring retirement savings at all, or grossly underfunding your nest egg.
Again, according to the Center for American Progress,
"Most elderly poor are women. Very elderly women have even higher poverty rates. As in other age groups, poverty does not affect senior men and women equally. A lifetime of lower earnings due to wage discrimination, absence from the labor market due to childbirth, and jobs that are less likely to have employer-sponsored retirement plans takes its toll."
As women we know that we have more hurdles to overcome than men. Therefore we PLAN more effectively for our retirement. No one will do it for us, not our parents, our kids, or government. If you are 25 years old and have a good job, open that 401k and put 15% in it in a moderate plan. Experts say that that amount for someone your age compounded over time will be enough.
But for those of us who have waited? 15% will not be sufficient for us. Many articles I've read say that those of us in our 40's and older may need 25% - 30% contribution rates. My goal is to increase to 20% by 2016.
This is the lesson of this article:
Start your 401k today if you have not already.
Any amount that you contribute is better than zero.
If you already have a 401k increase your contributions 3% today!!
Next article in the Single womens guide to retirement series:
Where did our money go last month?
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