Finance

Moving Towards a Financially Secure Retirement for Women

August 21, 2017 • 5 min read

An old adage goes: “women retire, men die.” Unfortunately, this saying may be getting a modern update because of some alarming trends from a survey about the number of women business owners who are prepared for a financially secure retirement. A national study by Leading Retirement Solutions (LRS) in 2017 found that a large percentage of women business owners are unnecessarily putting their retirement at risk due to inconsistent saving habits. The results of this study were introduced in the first installment of this 3-part series, “Retirement for Women Business Owners: Only 50% Ready, Study Shows.”

Women unprepared for financially secure retirement

Our first article revealed the results of our survey, showing that 67% of the population of women in the U.S. are not prepared for retirement. According to this survey, women business owners are not that far behind, with a meager 50% who said they are prepared for retirement.

Financial independence for women business owners remains a priority

The good news is that women business leaders are actively seeking financial independence. The study revealed that even though only 23% of women business leaders have a written retirement plan, 90% are making contributions to a retirement plan account in one way or another. The unfortunate news is that even though a modest amount of contributions to your plan now will help your retirement later, you may still find yourself working well into your golden years (when you could be retired to the beaches of the Caribbean with your peers… though I’m sure you’ll get a postcard that says, “Wish you were here!”).

The disparity between the one-half of women business owners who are already on the golden brick road to a financially secure retirement, and the other half, appears largely to be the result of inconsistent saving habits. The half of women business owners that are not prepared for retirement are reinvesting most of their profits, and even their own savings, back into their businesses, leaving little leftover to set aside for retirement.

Get on the path to a financially secure retirement for women business owners:

1) Start saving and contributing now! You’re busy running your business now, and it may be difficult to imagine putting away any of your needed business capital for your retirement savings. A simple conversation with your retirement plan provider will help you get started, and ultimately reach your goals. Avoid an all-or-nothing mindset: saving or contributing even a little is better than not saving or contributing at all. That beach in the Caribbean might be closer than you think.

2) Building your savings and retirement plan holdings creates business capital. There are a number of ways you can tap into your retirement savings, in a tax-free way, for additional short- and long-term business capital from time to time. Building up your personal and retirement plan savings creates potential operating capital for your business needs.

3) Increase what you save and contribute. Aim higher in the amount you save, whether it’s setting aside more money in a savings account or making large contributions to your company retirement plan. Work to reduce debt in your personal and professional life. Debt is an “ugly factory,” putting your green little employees (i.e. money) to work for someone else. Instead, put your money to work for you by contributing to your retirement plan.

4) Contribute more frequently to your savings account(s) and your company retirement plan. Work with your retirement plan provider and utilize whatever payroll services you are using to increase the frequency of your retirement plan contributions. A higher-frequency contribution can dissipate the impact that a large, lump sum contribution can have on your daily life.

5) Ask for more. As a business leader, revaluate your pricing strategy and operational costs to meet your needs. Furthermore, consider that an owner’s contribution to their retirement should be considered a company expense that is covered by revenue.

The path towards a financially secure retirement for women

Getting back on the path to retirement requires just a few simple steps in the right direction. You’ll be amazed at how quickly you can find that golden brick road that some of your peers are already on. Before you know it, you will be the one sending postcards and working towards a perfect tan.

In the final part of this series on retirement for women business owners, we will dive into the final trend that emerged from the LRS study, and learn more about how to avoid the pitfalls of poor retirement planning. See the full results of the study here.

Kirsten L. Curry is an Entrepreneur, Attorney at Law, and Founder and President of Leading Retirement Solutions, a company that designs, sets up, and administers the right retirement plan for companies and their employees.


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