In recognition of Minority Mental Health Month, it’s important to note this imbalance in minority preparedness for retirement. In order to alleviate the financial stress of your employees, certain steps can be taken in order to increase their financial health.
The number of wealthy women in the United States is rising twice as fast as the number of wealthy men according to CNBC. Many experts estimate that by 2030, women will control as much as two-thirds of the nation’s wealth. As these indicators all pointing to financial risings for females, it is important that women plan their retirement savings accordingly.
One of the biggest issues in retirement remains the cost of health. With the enjoyment of a longer retirement comes the cost of extended healthcare coverage. Furthermore, healthcare costs are increasing more than two-and-a-half times the rate of inflation. Additionally, as life expectancy rates continue to climb, so does the amount of money needed to sustain an individual’s costs over his or her lifespan.
A Federal Reserve report on the economic well-being of U.S. households in 2015 found, among other things, that 31 percent of non-retirees reportedly “have no retirement savings or pension whatsoever.” Where households are supported by two incomes, some may only have one spouse contributing to the retirement fund. As they approach retirement age, many couples are left wondering how they can contribute to the nest egg.
It has been long assumed that once children grow up and leave home, reductions in spending will follow as parents handle a more disposable income. However, recent findings have shown that many households aren’t showing an increase in savings as one may expect. For many empty-nesters, a later in life savings jump is crucial for families that have been supporting their children for the past 20-some-odd years. According to certain estimates, empty-nester’s savings are supposed to increase by as much as 12 percentage points. But a recent study performed by the Boston College Center for Retirement Research found that 401(k) savings plans are only showing a mere increase in saving of 0.3% to 0.7%.
Many 50-somethings are at some sort of crossroads in life. Several major events like getting married, having kids or buying a house have already happened to them. Their children are growing up, becoming financially independent and could be headed off to college in the fall or are even beginning to start a family of their own. When expenses start to taper off, it is the ideal time for 50-somethings to take a closer look at their retirement savings and start ramping up contributions, especially if they aren’t on track to reach their goals.