Black women are suffering wage wise, earring significantly less than their white male counterparts, unable to properly prepare for retirement.
Gender equality shouldn’t end when you finally reach your corner office, but with women nearly twice as likely to retire in poverty, and black women wedged in the financial constraints of the wage gap, no matter your workplace status, the deficit manages to creep up and affect women most during their retirement years. In effort to get ahead of this deadly curve, its recommend that women begin planning for retirement as early as their twenties.
A December report by the Employee Benefit Research Institute found that the current median in a 401(k) savings account is just above $18,000. And the median retirement income for women in 2010 was just 59% that of men, according to the U.S. Government Accountability Office.
Challenges to wealth building are an even larger feat for African American women. As retirees, Black women experience a poverty rate fully five times that of white men (16% vs. 3%). Due to lower marriage rates and higher divorce rates, Black women are much less likely than other women to be eligible for Social Security Spouse or Widow Benefits. In fact the number of Black women who do not qualify for this benefit is double that of white women (34% vs. 14%) according to the Black Women in America Report 2014.
The Paycheck Fairness Act, which would work to end gender discrimination in pay, is a good initial effort to leveling the playing field in retirement. But we still have a long way to go. To give women, especially black women any hope of enjoying their golden years America is in need of a long-term, comprehensive strategy to solve retirement insecurity. The future of women’s economic security rests on a solid solution.
In effort to achieve freedom during retirement it is suggested that female citizens begin to think out of the box when searching for viable additional income. CNN reports on three ways to catchup on the retirement front.
1. Maintain a moderate investing stance: Keeping, say, 40% to 60% of your savings in stocks, depending on your risk tolerance — and focus on finding ways to save as much as you can. You may be surprised at how much you can grow your nest egg’s value in a relatively short period. Instead of looking for an investing solution, such as a risky “hot stock” to bail you out.
2. Put in a few extra years on the job: Working even just a few more years can improve your retirement readiness for several reasons. First, you’ve got more time to save and earn a return on existing and new savings. Another three years of saving plus investment returns on new and existing savings for our hypothetical 55-year-old socking away 20% a year would boost the value of her nest egg by roughly $135,000 to about $515,000. Those three extra years of work are also three fewer years that nest egg has to last in retirement.
3. Think outside the box: If you’re willing to be creative and resourceful, you can find even more ways to improve your situation. For example, just as working a few extra years before you retire can enhance your retirement security, so too can taking on occasional or part-time work after retiring.