Personal Finance Experts Share Strategies Women Should Use to Build Wealth

  • Because of unique career challenges, women will have to invest differently to retire comfortably.
  • Saving in retirement can be difficult for women due to pay gaps and time spent at work.
  • Experts Bobbi Rebell Kaufman and Stacey Tisdale provide tips for building and maintaining wealth.

The goal of successful retirement is to ensure that you have enough funds to maintain your lifestyle and even enjoy your retirement years. Saving for this goal needs to start early and be consistent, but for women it can be difficult for many reasons: the gender pay gap, time spent outside of the work force, being a caregiver and even bearing the cost of college expenses for their children.

One of the main reasons why saving is especially important is that women usually outlive their husbands and studies show that women 80% Men are more likely to live in poverty during retirement.

We spoke with personal finance expert and author of How to Be a Financial Grownup: Proven Advice from High Achievers on How to Live Your Dreams and Enjoy Financial Freedom, Bobbi Rebell Kaufman and Stacey Tisdale, CEO of Mind Money Media, Inc. To discuss strategies that women can use to continue investing and prepare for future retirement.

“It is vital that women understand the challenges they face in saving and investing,” Kaufman told Insider. “Given the fact that women make less money over the course of their careers—and some choose to leave the workforce temporarily—it’s important to recognize these barriers and make retirement a priority,”

These are real facts when it comes to women and their financial preparedness, but there are steps women can take to prepare.

Understand your debt and how it can affect your retirement

The conventional wisdom in retirement planning is to work hard, save some of your paycheck, and invest in stock and real estate. But this formula isn’t a one-size-fits-all for many working women.

“The retirement system is not put into our lives,” says Tisdale. “It was never set up for student loan debt and this formula doesn’t work for anyone anymore.”

In addition to student loans, other major obstacles to retirement can include obtaining a mortgage, car loans, and carrying large credit card balances.

“Any debt you owe can affect your retirement,” says Tisdale. “It’s important to address any debt you have or include it in your investment and retirement savings strategy.”

Plan to retire and find out Types of retirement plans You can contribute to it. Learn about the challenges you will face in retirement and invest to mitigate these issues.

“Take a moment and see if you’re on the right track with your investment, and if you are, you shouldn’t change what you’re doing no matter what happens in the market,” Kaufman says. “But if you find you’re not on the right track or lagging behind, it’s time to chart a new course.”

Take advantage of the new digital economy to generate more income

If you’ve been reviewing your savings and investments and realize you’re not where you want to be, it’s time to take steps to catch up.

“I’ve talked to women in their forties who are worried about how much they save and get second jobs or start side businesses so they can save more,” Kaufman says.

But it will definitely take more than just telling women to save more money or make more money. It will require a real shift in how investment and long-term financial goals are viewed.

“It’s more than just saving more, it’s really getting out of the scripts and traditional ways that tell us how to make money and invest,” says Tisdale.

Women no longer have to look for traditional ways to earn money to increase their wealth. Fintech and the digital economy offer opportunities to build businesses and investment portfolios outside of your 401K that can be used for retirement.

“There are ways to invest now that don’t require big cash and upfront investments, you can invest small in the stock market and real estate, and even when you invest small amounts of money, it can turn into thousands of dollars over time,” Tisdale said.

women face a retirement wealth gap Driven by the gender wage gap, many will have to find a way to deal with the shortfall in savings.

“Not being prepared for retirement can really lead to an uncomfortable financial retirement,” she says. “There will come a time when you won’t be able to work anymore, so do everything you can now to build wealth and invest more even if it means looking for ways to make more money.”

Create layered resources about your financial security.

Women should have more than one way to invest. Distributing money and savings across multiple asset classes helps reduce risk and build wealth in a safer and more stable way.

“We have to do more than save money in a 401K and a bank account,” Kaufman says.

Although a woman takes charge of her finances when it comes to daily spending and saving on a rainy day, it is important to go beyond the emergency fund conversation.

“Even if you increase your contributions to 401K, you can still save and invest more money, and opening a brokerage account is a great way to do that. You may not get the tax benefits of a retirement fund, but you also win ‘don’t get the restrictions,’” Kaufman says.

Be prepared to break away from the traditional. The old ways of retiring don’t work, especially for women. It is estimated that you will need at least $1.5 million to comfortably retire and with the gender pay gap, women will need to invest differently to get there.

“If you stick to the same script, you won’t be ready to retire. Just working and saving money won’t get you there,” says Tisdale. In addition to investing in retirement accounts, I also like to hire a financial advisor to help you plan your investment and build a strategy tailored to your specific situation.

Be aware of what can be accessed even without company links

Nearly 2 million women Leave the workforce During the pandemic they have not returned to a large extent. This may stop investing and saving for retirement if your only means of saving is through an employer-sponsored retirement plan.

Women should consider using a Ruth Iran For their retirement investments, Kaufman recommends. With a Roth IRA, money is set aside for retirement after taxes, so your investment grows tax-free.

“A Roth IRA is a good investment vehicle for those who do not have access to an employer-sponsored retirement plan,” Kaufman suggests. “If you leave the workforce, your savings and investments don’t have to end in the future — you can do more than just pass your 401(k) into an IRA, you can keep saving, which will keep you on track to getting what you need for retirement.”

Everyone should benefit from the easier ways to save and invest, but this is really good for women.

‘Investment applications such as oak tree fruit or stash They are simple apps that allow you to save and invest and you can start with small amounts on a consistent basis. My son actually told me about Acorns a few years ago and I started investing and this account grew quickly because I stayed consistent,” says Tisdale.

“Everyone needs to save for retirement, but for women, it’s more of a priority because we literally play, get paid less and live longer. We have to have the money for financial security later in life,” Kaufman says.

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