Women & Retirement Poverty – What You Can Do

Episode Transcript

Speaker 1 (00:00):
Welcome back to the wealth Wise Woman podcast. I'm your host, Anna,
and as always, a quick reminder, this podcast is for
educational and informational purposes only. It is not financial advice.
Always do your own research and consult with a licensed
professional before making any financial decisions. Today, we're tackling a

(00:21):
critical and often overlooked topic, Women in retirement poverty. What
you can do. Women face a higher risk of retirement
poverty due to systemic issues like the gender pay gap,
caregiving responsibilities, and longer life spans. Yet with the right strategies,
you can build a secure and fulfilling retirement. This episode

(00:44):
is designed to empower women to take control of their
financial future, whether you're starting in your twenties or catching
up in your fifties. From understanding the challenges to creating
actionable plans, we'll explore how to avoid retirement poverty and
in your later years. Let's dive in and secure your
financial independence. In this comprehensive eight part episode, we'll cover

(01:09):
the reality of retirement poverty for women, understanding the systemic
barriers women face, assessing your retirement readiness, strategies to build
a robust retirement fund, leveraging retirement accounts and benefits. Overcoming
common obstacles to saving for retirement. Real world examples of
women planning for retirement. Practical steps to start building your

(01:33):
retirement today. Let's get started and ensure your retirement is
one of abundance not scarcity. Part one, The reality of
retirement poverty for women. Retirement poverty, having insufficient income to
cover basic needs in later years, is a significant risk

(01:53):
for women. Here's why it matters. Statistics studies show to
twelve percent of women over sixty five in the US
live below the poverty line, compared to seven percent of men.
Single women and women of color face even higher risks
twenty percent for Black women. Financial impact. Women need twenty

(02:15):
percent more savings than men due to longer life spans
five and seven years and higher health care costs two
hundred dollars zero zero zero plus in retirement. Systemic drivers,
lower lifetime earnings, career interruptions, and limited access to retirement
plans increase vulnerability consequences. Retirement poverty can mean relying on

(02:39):
minimal social security one dollar five hundred month average, cutting essentials,
or working past seventy hopeful outlook. With planning, women can
build substantial retirement funds, even starting small to live comfortably
and independently. Example, a woman earning fifty thousand dollars needs

(03:01):
one million dollars one point five million dollars for a
thirty year retirement saving dollar two hundred slash month from
age thirty at seven percent, return grows to one point
two million dollars by sixty five. Avoiding poverty retirement poverty
is a real threat, but proactive steps can transform your

(03:22):
future into one of security and freedom. Part two, Understanding
the systemic barriers women face. Women face unique challenges that
heighten retirement poverty risk, gender pay gap. Women earn eighty
two cents for every dollar a man earns, leading to

(03:44):
four hundred thousand dollars one million dollars less in lifetime earnings.
This reduces savings potential caregiving breaks. Women are more likely
to pause careers for caregiving children parents. Losing one to
five years of income and retirement can contributions longer life spans.
Women live eighty eighty five years on average, requiring savings

(04:06):
to last twenty thirty years post retirement compared to fifteen
twenty for men. Limited access to plans, women are more
likely to work. Part time or in jobs without four
hundred and one KS, with only fifty percent of women
having access versus sixty percent of men. Lower financial literacy
societal norms often discourage women from learning about investing, leaving

(04:31):
them less prepared to grow wealth. Example, Maria, a teacher
took three years off for caregiving, losing one hundred fifty
thousand dollars in earnings and nine thousand dollars in four
oh one k contributions, delaying her retirement by five years.
Understanding these barriers helps women plan strategically to overcome them

(04:51):
and build a secure retirement. Part three Assessing your retirement
readiness to avoid aid retirement poverty. Evaluate your current financial
position and retirement needs. Calculate retirement needs. Estimate expenses using
a seventy eighty percent replacement rate of current income example

(05:13):
fifty dollars zero zero zero where year income needs thirty
five thousand dollars forty dollars zero zero zero year in retirement.
Assess current savings check four oh one k IRA or
savings balances. Aim for one x salary saved by thirty
three x, by forty six x by fifty for example

(05:34):
one hundred fifty thousand dollars by fifty for fifty thousand
dollars income estimate social Security Use the SSA dot gov
calculator to project benefits. For example, one dollar eight hundred
slash month for fifty thousand dollars earners, women receive twenty
percent less due to lower earnings. Identify gaps. Compare projected

(05:54):
savings to needs. Example one million dollars goal by sixty
five versus two hundred thousand dollars current savings requires dollar
five hundred slash month contributions. Credit and debt check ensure
a seven hundred plus credit score for loans for example
mortgage and pay off high interest debt ten percent to

(06:16):
free up savings. Example, Lina forty earning sixty thousand dollars,
has fifty thousand dollars saved, but needs one point two
million dollars by sixty five. She calculates a dollar six
hundred slash month savings gap, prompting her to adjust her plan.

(06:36):
Pro tip use free tools like nerd Wallet's Retirement calculator
or Personal Capital to assess readiness and track progress. Part
four Strategies to build a robust retirement fund. Here are
five key strategies to build wealth and avoid retirement poverty.
Maximize savings early. Start saving ten to fifteen percent of

(07:01):
income in your twenties or twenty thirty percent later. Example
dollar two hundred slash month at seven percent from age
twenty five grows to six hundred thousand dollars by sixty five.
Invest for growth. Put savings in low cost ETFs for
example Vovti via robo advisors like Betterment aim for six

(07:22):
eight percent returns to outpace inflation. Diversify income. Start a
side hustle. For example, dollar two hundred slash month freelancing
to boost retirement contributions. Example dollar one hundred slash month
extra invested grows to three hundred thousand dollars in thirty years.

(07:43):
Cut non essential spending, Reduce dining out or subscriptions. Dollar
one hundred slash month to redirect to retirement accounts saves
one dollar two hundred year plan for health care. Save
in an HSA four dollars one hundred and fifty years.
Max for individuals for tax free medical expenses in retirement.
Example prea thirty saves dollar three hundred slash month in

(08:07):
a roth IRA and dollar one hundred slash month in
an HSA. By sixty five, her IRA grows to nine
hundred thousand dollars and HSA covers fifty thousand dollars in
medical costs ensuring security. These strategies help women close savings
gaps and build substantial retirement funds despite systemic challenges. Part

(08:31):
five Leveraging retirement accounts and benefits. Maximize retirement accounts and
benefits to grow wealth tax efficiently. Four oh one K
plans contribute to employer plans, especially with matches. For example,
four per cent of fifty thousand dollars equal sign two
thousand dollars free money max Twenty three dollars zero zero

(08:54):
zero year. Twenty twenty five iras use WROTH IRA seven
dollars zero zero zero year for tax free growth or
traditional IRA for tax deductions ideal for those without four
hundred and one kas SVPIRA slash solo four oh one
K for self employed women contribute up to twenty five

(09:16):
percent of income max Sixty nine dollars zero zero zero
year for tax deferred growth, Social security optimization delay benefits
to age seventy for a twenty four percent higher payout.
For example, one dollar eight hundred month versus one thousand,
four hundred and fifty dollars at sixty seven catch up
contributions over fifty add seven thousand, five hundred dollars extra

(09:41):
to four oh one K or one thousand dollars to
IRA annually to accelerate savings. Example, Sophie forty five contributes
dollar five hundred slash month to a four to oh
one K with a four percent match dollar two hundred
slash month and dollar two hundred slash month to a
wroth IRA by sixty five per dollar seven hundred slash

(10:05):
month grows to six hundred thousand dollars supplemented by two
dollars zero zero zero month. Social Security pro tip use
Vanguard or Fidelity for low fee accounts zero point zero
three zero point zero eight percent fees to keep more
of your returns. Part six. Overcoming common obstacles to saving

(10:27):
for retirement. Women face barriers to retirement savings, but these
solutions help limited income, low earnings reduce savings. Solution start
with twenty five dollars dollar fifty slash month in a
roth IRA and increase with raises or side hustles dollar

(10:47):
one hundred slash month. Caregiving breaks, career pauses, limit contributions.
Solution save small amounts ten dollars dollar twenty slash month
during breaks and catch up later with one dollar zero
zero zero month. Lack of confidence financial jargon intimidates solution

(11:09):
read get good with money fifteen dollars or join X
groups like at her first one hundred k for accessible education,
unexpected expenses, emergencies, derail savings. Solution build a one thousand
dollars that would three thousand dollars emergency fund first. To
protect retirement contributions late start starting in your forties or

(11:31):
fifties feels daunting. Solution use catch up contributions and invest
aggressively five hundred dollars one dollar zero zero zero month
in ETFs. Example, Clara fifty started saving late with dollar
three hundred slash month in a sep ira and dollar
one hundred slash month in a roth ira. By sixty

(11:53):
five per dollar four hundred slash month grows to one
hundred fifty thousand dollars at seven percent supplemented by social security.
A gendered perspective, women's caregiving roles and lower earnings require flexible,
small step strategies to stay on track for retirement. Part seven.
Real world examples of women planning for retirement. Here are

(12:19):
three hypothetical women who overcame barriers to secure their retirements.
Llila twenty eight, retail worker Llila earning forty thousand dollars
saved dollar one hundred slash month in a roth IRA
after reading the Simple Path to Wealth. By sixty five,
her savings grow to three hundred thousand dollars, ensuring a
comfortable retirement with one dollar five hundred month social security.

(12:43):
Amara forty, part time nurse Amara with caregiving breaks saved
dollar two hundred slash month in a four oh one
K with a three percent match and dollar fifty slash
month in an HSA. Her dollar two hundred fifty slash
month grows to four hundred thousand dollars by sixty five,
covering healthcare and living costs. Emma fifty five consultant. Emma

(13:06):
starting late, used catch up contributions one dollar zero zero
zero month to ASCEEP array. Her twelve dollars zero zero
zero year grows to two hundred thousand dollars by sixty seven,
paired with two dollars two hundred dollars month social security
for a secure retirement. These stories show that Starting small,

(13:27):
leveraging accounts, and staying consistent can prevent retirement poverty. Part
eight Practical steps to start building your retirement today. Ready
to secure your retirement, here's a detailed action plan. Assess needs.
Use a retirement calculator for example nerd wallet to estimate

(13:47):
your goal, for example one million dollars for forty dollars
zero zero zero year retirement. Check current savings this week.
Start small. Save twenty five dollars dollar fifty slash month
in a roth ira or four to oh one k
automate via Vanguard or your employer's plan. Cut expenses. Reduce

(14:07):
fifty dollars dollar one hundred slash month in non essentials
for example dining out using ynab or Mint. Redirect to
retirement savings. Boost income. Start a side hustle one hundred
dollars dollar two hundred slash month via upwork or Etsy.
Invest fifty percent in retirement accounts. Educate yourself. Read The

(14:33):
Simple Path to Wealth seventeen dollars or follow at Bigger
Pockets on x for investing tips. Build an emergency fund.
Save one thousand dollars three thousand dollars in a high
yield account. Four point five percent apy to protect retirement contributions,
review annually, check savings progress, and adjust contributions. For example,

(14:53):
increased dollar twenty five slash month after a raise. Consult
a fee only planner one hundred dollars dollar three hundred
slash hour. For complex plans, join a community. Engage with
women's financial groups on x for example Women's Personal Finance
for support and accountability. Example plan, A thirty five year

(15:15):
old earning fifty thousand dollars saves dollar two hundred slash
month in a four oh one K with a four
percent match, dollar one hundred sixty seven slash month and
dollar fifty slash month in a roth IRA. She cuts
dollar fifty slash month in subscriptions, redirecting to savings by
sixty five. Her dollar four hundred seventeen slash month grows

(15:39):
to nine hundred thousand dollars. Insuring a secure retirement pro tips.
Use free tools like SSA dot gov to estimate social security.
Listen to retirement podcasts for example, choose a FI on
Spotify for inspiration. Celebrate milestones for example, ten thousand dollars
saved with low cost rewards five dollars coffee retirement poverty

(16:03):
is a real risk for women, driven by pay gaps, caregiving,
and longer life spans, but it's not inevitable. By understanding barriers,
assessing your readiness, and using strategies like maximizing retirement accounts
and diversifying income, you can build a secure future. Start small,
stay consistent, and leverage education and community to stay motivated.

(16:28):
Your retirement can be a time of freedom, adventure, and peace,
not struggle. Take control today to ensure tomorrow's abundance. Here's
your action plan to start today. Calculate your retirement needs
using a free online calculator. This week, open or contribute
twenty five dollars dollar fifty slash month to a roth
ira or four oh one ks and automate it. Cut

(16:52):
dollar fifty slash month in non essential spending and redirect
to savings. Join a women's financial group on x or
read a retirement book for motivation. Tune in to next
week's episode for tips on maximizing social security benefits. The
best day to start planning for retirement was yesterday. The
second best is today. Don't let systemic barriers stop you

(17:16):
build the retirement you deserve. Thanks for joining me on
the wealth Wise Woman Podcast. If this episode inspired you
to secure your future, share it with a friend who
needs a retirement wake up call. Until next time, keep
building your wealth wisely.