Building Better Retirement Strategies for Women

Building better retirement strategies for women is crucial due to unique challenges they face, such as longer life expectancies, potential career breaks, and wage disparities. Here are some strategies to help women better prepare for retirement:

1. Start Early and Save Consistently "the foundation of any retirement strategy for women"

Importance: The earlier you start saving, the more time your money has to grow through compound interest.

Action Steps:

• Open a Retirement Account: Start contributing to a 401(k), IRA, or other retirement accounts as early as possible.

• Automate Savings: Set up automatic contributions to your retirement accounts to ensure consistent savings.

2. Maximize Employer Benefits

Importance: Employer-sponsored retirement plans often come with benefits like matching contributions.

Action Steps:

• Contribute Enough to Get the Match: Always contribute enough to take full advantage of any employer match.

• Understand Your Plan Options: Educate yourself on the different investment options available in your employer-sponsored plan.

3. Plan for Career Breaks

Importance: Women are more likely to take career breaks for caregiving, which can impact their retirement savings.

Action Steps:

• Save More When Working: Try to save more during working years to offset periods of lower or no income.

• Spousal IRA: If married, consider contributing to a spousal IRA during career breaks.

4. Invest Wisely

Importance: Smart investing can significantly boost retirement savings.

Action Steps:

• Diversify Investments: Spread your investments across different asset classes to manage risk.

• Consider Professional Advice: Consult with a financial advisor to develop an investment strategy tailored to your goals and risk tolerance.

5. Increase Financial Literacy

Importance: Understanding financial concepts helps make informed decisions about retirement planning.

Action Steps:

• Education: Take courses or read books on personal finance and retirement planning.

• Stay Informed: Keep up with financial news and trends to make knowledgeable investment choices.

6. Address Wage Disparities

Importance: Wage gaps can result in lower lifetime earnings and savings.

Action Steps:

• Negotiate Salaries: Regularly negotiate for higher pay and benefits.

• Pursue Career Advancement: Seek opportunities for promotions and career development to increase earning potential.

7. Plan for Longevity

Importance: Women tend to live longer than men, necessitating a larger retirement fund.

Action Steps:

• Save More: Aim to save more than the average recommended amount.

• Longevity Insurance: Consider products like annuities that provide guaranteed income for life.

8. Social Security Optimization

Importance: Maximizing Social Security benefits can provide a crucial income stream in retirement.

Action Steps:

• Delay Benefits: If possible, delay claiming Social Security benefits until age 70 to receive the maximum amount.

• Spousal Benefits: Understand and take advantage of spousal and survivor benefits.

9. Estate Planning

Importance: Proper estate planning ensures your assets are distributed according to your wishes and can provide for loved ones.

Action Steps:

• Create a Will: Ensure you have a legally binding will.

• Designate Beneficiaries: Regularly update beneficiaries on retirement accounts and insurance policies.

• Power of Attorney: Set up a power of attorney for financial and health care decisions.

In Kenya, women chamas are a popular way for women to make savings hence helping them even in their retirement. Ndovu Investment offers individual, business and chama accounts where registered chamas can save and invest through the Ndovu platform.

This is very important since these chamas can create savings goals where deposits are made for the agreed period of time. Additionally, it offers a great opportunity for the chamas and individual women to grow their money through investing in profitable investments including bonds, MMF and ETF’s.