Yahoo Finance 5 Ways for Women To Ramp Up Their Retirement Savings in 2024, According to Experts
Women still earn, on average, 16% less than men, and that percentage is even worse for women of color. This harsh reality comes into even starker relief when retirement is around the corner, and some women’s bank accounts aren’t as robust as they’d be in an ideal world.
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But fear not! Experts at Fidelity addressed the ways in which women can ramp up their retirement savings in their most recent Women Talk Money newsletter. The newsletter dives into all the ways women can start getting their finances in order — for retirement and beyond.
Here are five ways for women to up their savings before retirement, according to the experts.
Check If You’re on Track To Retire Rich
According to the Fidelity newsletter, the first step in ramping up your retirement savings is to assess your current situation and determine if you’re on track to meet your financial goals.
They recommend using the Fidelity Retirement Score tool to get a real picture of how ready you truly are based on your age, income and existing savings. The tool “can show you how adjustments to monthly savings, investment style and other factors could impact your preparedness,” said Fidelity.
If the numbers aren’t cutting it, that’s your cue to go into overdrive.
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Take Advantage of Catch-Up Contributions
If you’re approaching retirement age, maybe you’ve found that you have less money saved for retirement than you need. Fortunately, the IRS recognizes this challenge. If you’re 50 or older, it offers what are known as catch-up provisions. These special provisions let you contribute additional funds to your retirement accounts.
In 2024, the catch-up contribution limit for 401(k) and 403(b) plans is $7,500. This is on top of the standard contribution limit of $22,500.
For individual retirement accounts (IRAs), the catch-up contribution limit is $1,000, on top of the regular limit of $6,500.
This is a great way to give your retirement savings a much-needed boost, helping you make up for lost time.
Master Tax-Advantaged Account Hacks
If you want to keep more of your own money, then you need to get strategic with accounts that offer excellent tax advantages, like 401(k)s, IRAs and HSAs.
The Fidelity newsletter shared this genius HSA hack: “You may want to consider paying for current-year qualified medical expenses out of pocket and letting your HSA contributions remain invested in your HSA. That way, the money has the potential to grow tax-free and be used to pay for future qualified medical expenses, including those in retirement.”
Get That Money Working Smarter
Simply saving cash isn’t enough — you need to invest it wisely for maximum growth.
The newsletter advises slowly decreasing stock exposure as you age while maintaining a diversified portfolio across investment types: “Whatever your projected retirement date, your goal should be to have a portfolio with exposure to various types of investments that can provide the opportunity for growth and the potential to outpace inflation, along with investments that offer some degree of risk-reducing diversification.”
Index funds and ETFs are smart bets for keeping fees low.
Define Your Dream Retirement Vision
Building wealth is only half the battle. You need to decide how you actually want to spend those sunny retirement years. Maybe you dream of traveling the world, pursuing hobbies or spending quality time with your family. Having that crystal clear vision will keep you motivated to sacrifice and save now for the payoff later.
By following these expert-approved moves from Fidelity, you could be welcoming retirement as a bona fide multi-millionaire. Happy retiring!
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