When you consider the unique challenges faced by women in their 30s, including career breaks to have children, it’s hardly surprising that this age group lags behind others when it comes to retirement savings.
Mother, wife or partner, buying a home, part time work or taking time out from careers to care for the kids – and the desire to put the people you love first – can often leave retirement planning in need of a little TLC.
As popular American blogger, Molly Mahar, puts it: “As women, we pride ourselves on taking care of others. We commit ourselves to our partners, our best friends, our colleagues, our extended families, our neighbours – the list goes on and on. We show love and respect by being there for them and following through on commitments”.
But where does that leave your future?
Some New Zealand financial advisers report that too many women rely on their partner’s retirement plans, but separation and death are just two common events that could upset that strategy.
Perhaps you do have a voice in the back of your head about making preparations for your retirement, but it often gets pushed aside by the daily demands of caring for your family and meeting the mortgage payments.
For some women, the very thought of preparing for retirement just gets dumped into the ‘too hard’ basket because there never seems to be any time.
1. Make a commitment
Ignoring that warning voice in favour of other priorities is the first obstacle to overcome. Recognising that planning for your retirement is important, and then making a commitment to begin is your first step.
If it’s hard to think about something that seems so far away, implement what social psychologist Winter Mason Ph.D. calls a ‘commitment device’. Writing in Psychology Today, Mason cites the example of a Christmas Club saving account that you can’t make withdrawals from until the end of the year, as one such device.
In New Zealand, there are savings account facilities that are more difficult to withdraw funds from, but an easy commitment device is your KiwiSaver account.
With KiwiSaver, your funds are generally locked in but contributions to your KiwiSaver account now could make a big difference to your future.
The important thing is to recognise that you need to stop procrastinating and take some positive action to secure your retirement. Put in place some milestone steps as you implement your plan, and reward yourself when you achieve those milestones.
Don't make the mistake of thinking it will be easier to save in the future. Between building a household, raising children and paying the mortgage, that day rarely eventuates.
2. Set goals, have a plan
The Financial Services Council of New Zealand recommends that Kiwis contribute 10% of their income to retirement, including any contribution their employer may make to a retirement savings scheme on their behalf.
The cost of living in the future, income projections and other factors may make it seemingly impossible to predict how much income you will need during retirement, but there are calculators and other tools that can help you develop accurate goals – not to mention a number of experts who would be happy to sit down with you over a coffee and answer your questions.
3. Eliminate debt
Debt is hard to live without, and hard to live with.
However, debt is costly – particularly consumer and credit card debt. While you don’t have to cut up your credit card – it can be a useful device in an emergency – look to reduce all your debt and use the money saved to kick-off your retirement fund.
Most important, however, is not to let ‘retirement’ happen to you.