If you are a woman then you need to save two times the amount as men in order to build your retirement funds/corpus. Yes, you read it right!
It is important that every women, whether she is in her 20’s and has just started working or even those who are in their late 30’s or 40’s and have been working for over a decade or more, gets invested. One of the major reasons behind saving for retirement is that it allows women to build their financial future. No matter what your reasons behind staying single (i.e. single by choice, divorced, widowed or separated), you must remain proactive about managing your finances, especially when it comes to planning for retirement.
Below, discover the top 3 reasons why women must plan and save for their retirement:
Women in India earn less: Yes. That statement holds a lot of truth. In fact, according to a survey, women in India earn 20percent less when compared to the men. This pay gap increases with an increase in the experience level. This implies that women earn less and hence contribute less towards their overall savings. For instance if a man earns Rs50,000 per month and keeps 10percent of that amount aside as part of retirement savings, then he will save Rs60,000. On the other hand, a salary of 20percent less would mean that women would save Rs40,000 every month.
Females Work for Lesser Number Years: Apart from drawing a lower salary, females also work for lesser years when compared to the men. Most of them usually take a break for taking adequate care of their child or due to health reasons. This means that during the entire period they are saving almost nothing that can add up as their retirement saving. Beside, even when they re-join later, they will begin at a much lower salary and hence get lesser retirement benefits.
Life Expectancy for Women is higher than Men
Females usually live longer than men. In fact, their life expectancy at birth is 69.9 years in comparison to the men with a 66.9 years life expectancy. At the age of 60, when people in India retire, men have a life expectancy of 77.2 years whereas for women it is 78.6 years. This clearly implies that the amount of retirement money with women should be bigger when compared to the men.
What Can Women Do About It?
- Women must start saving at least two times the amount as men.
Rather than saving a mere 10percent of their salaries, they must save 20-25percent of the amount for their retirement. There are multiple saving schemes and options available at the bank and with other financial organizations such as the VPF or the Voluntary Provident Fund that you can opt for and save more funds for your retirement.
- Make Better Investment Choices
The best way to ensure huge retirement savings is to make better investment choices. Women can look for equity and mutual fund investment schemes to save more. Such investment plans offer higher returns, eventually helping you to save more for retirement. But, don’t forget to invest in accordance with your goals. Always keep important factors such as taxation and inflation in mind and invest accordingly.
- Health Insurance is a Must
A good investment decision for women is that they must invest in a health insurance plan. With the growing number of diseases and highly healthcare inflation (in the range of 12-15percent), it is only sensible that you invest in a health insurance plan. This would also ensure that your retirment money remains intact during the old age.
- Aim for a Higher Salary
It is always advisable that you aim for a higher salary or at least bargain for an increment at your workplace. Remember, the higher your income, the more would be your contribution to your retirement fund.
Finally, make it a point that you continue to work even after child birth, marriage or after recovering from illness. The key to saving more for retirement is to plan ahead and better.