The National Institute on Retirement recently reported that females are “80% more likely than men to be impoverished at age 65 and older.” We’ve known for a long time that women make less money over a lifetime than men do and that battle is still being fought. But what can women of all generations do right now to ensure a more financially comfortable retirement?
1) Think really hard before you quit your job, retire prematurely or “go part-time” in favor of caregiving. Women, particularly those Generation X and Baby Boomers, leave the workforce in droves to take care of older or disabled loved ones. When one woman does this, it can have a spinoff effect on female generations to come. While it is certainly an appropriate choice in some circumstances, it’s crucial for Generation X and Baby Boomer women to consider the long term financial impact of such a decision.
2) Be a stay-at-home mom with a plan. Many Millennial and Generation X women opt to be stay at home moms. But no matter how much income your spouse brings in, you should keep your skills up-to-date. Even working five hours a month is money you could put into savings or sock away for retirement. Or at least volunteer or take classes in your field so you remain sharp if you ever do want to return to work.
3) Set strong financial boundaries with your adult children. Baby Boomers and Traditionalists are dealing with the phenomenon of boomerang kids who move back in after high school or college or never move out. Still others in the oldest generations are simply doling out cash regularly to their adult kids and grandkids for living expenses and “extras.” Enabling the younger generations financially has a long-term impact for many Baby Boomers and Traditionalists. Some will never get to retire while others simply experience extreme financial discomfort in retirement. Find the strength to tell your adult kids “no.”