TomorrowMakers

As woman, we face many challenges in life. But we rarely give importance to retirement planning when we are still young. Life goals will seem more assured and achievable if we spend some time researching various channels of retirement planning. How wonderful it would be if everyone could plan and save for life after 60!

The first step towards increasing one’s happiness quotient is to save money. This money should be invested or parked in a financial channel that allows it to multiply. This way, an investment plan for one’s retirement can be steadily implemented. Agreed, saving money is one of the biggest challenges that women face, especially if she is single. After all, saving together is more rewarding than saving alone.

Yes, women tend to have a tougher time after retirement, as they face many hurdles in their work life. Settling for lesser pay, being overlooked for promotions, fewer financial rewards, and smaller bonuses, are some obvious ones. Then there are the emotional challenges. The role women play as daughters, sisters, wives, mothers, or grandmothers puts them in a position of constant sacrifice, especially if they are in a financially stronger position. In the melee of life, a woman’s own needs are often overlooked. 

So make saving up a habit. To start with, women can begin with a small yet consistent monthly savings plan. The amount can be 10% of your total salary – or 10% after the fixed monthly expenses are deducted if you have dependents. The idea is to save as much as possible for retirement, and this should be deducted from the monthly salary. Saving for a holiday, your wedding, or that beautiful dress you had in mind are variables that should be accounted for over and above the fixed monthly savings.

Related: How and why should a woman secure her post-retirement life?

Here are three general challenges a woman might face compared to men while saving for their retirement:

1. Earning less than men

Women, more often than not, face some form of discrimination at the workplace. It is not unusual for a male colleague in the same field to earn more. Women are (quite wrongly) perceived to be weaker and less productive than men, which might explain the wage disparity. What’s worse, women rarely negotiate or persist the way men do. Since they earn less than men, there will be less money going into their retirement savings kitty.

2. Living longer than men

Studies show that women, on average, live five years more than men. So the dent in savings made due to earning less is further exacerbated due to living longer. Indian women are primarily dependant on their family for sustenance as they age and could face psychological problems with their caregivers if they are not suitably prepared with a retirement plan. Besides, the cost of healthcare is increasing with each passing year and one needs to be prepared for it.

3. Being more risk-averse than men

Women generally avoid taking risks, and are happy to adopt a conservative approach to savings. As a result, the savings they direct towards investments is generally put into standard investment plans rather than stocks or commodity investments. This attracts barely any growth by way of interest. Women in their early years should take more risks as there is time to make up for losses, but less risk-prone investments are preferable when one is near retirement age. Starting an early savings plan is the key to satisfactory retirement benefits, with proper short-term and long-term investment plans.

Related: 5 Retirement planning tips for couples

Precautions women should take

Here are some precautions that women can take for securing their retirement:

• It is recommended that you start saving right from the time of earning your first salary. If have never saved, please start immediately. Depending on your age, you could put your savings in different savings plans so that you have a mixed basket. Younger women who are just starting their first job can afford to take more risks than someone who is in the middle of their career path. A systematic investment plan (SIP) is recommended. Government or infrastructural bonds are another option. A small percentage can be allocated for gold bonds. Women should try to build a financial portfolio that is based on a diversified investment strategy, so that retirement returns are maximised. Besides, explore these 5 Tips every woman should follow to have a financially secured retired life.
   
• Since women tend to outlive men by a few years, they will need to invest more. If you are a homemaker, you should save even more and have a discussion with your partner about the importance of being financially secure in their absence. Make sure your partner has a life insurance policy that secures every member of the family. Also save for the kids’ education and healthcare expenses of any dependent relatives. Maybe you will want to make a down payment on a house. All these investments ensure your security and that of your family. If you are the sole earning member, you will need to build up the investments centred on you. Remember to leave clear instructions regarding nominees or dependents.
   
• Delay your retirement as much as possible. Negotiate with your employers to ensure that you get the salary and increments you deserve. It’s a competitive world out there, so if you perform well, make sure you are rewarded adequately by your employer. If you are self-employed, then consider these 5 ways to cushion your post-retirement life.
   
• Try to increase your income by monetising a hobby – whether as a part-time artist, a cashier at a neighbourhood store on weekends, or by running a small business such as a boutique. Any opportunity to augment your income will help you inch towards your goal.

Related: With a little planning, any single woman can live alone comfortably

Last words

A comfortable retired life is everybody’s dream. To achieve it, you must start saving early. Look online for investment tips, or consult a financial expert. Women today are well-informed and smart, so they understand that retirement is a period when one has to be self-sufficient. Many women do get support from their children in their old age, but you never know if you will be lucky in that respect. So save enough to live life on your terms. This way, you can take on the challenges of retirement and come out on top. Look at these 8 investment options for women for a happy retired life