Published by Taylor Financial Group (for women)
While I still have many successful years in my career to look forward to, I can’t deny that I’m not looking forward to retirement… eventually. Who isn’t? Although my love for my clients (and my children!) is the reason I wake up every morning, it’s impossible to not be excited traveling to places I’ve never been, and enjoying leisurely days. But, I won’t be able to travel the World and live the retirement life I want without maximizing my retirement savings now!
While it is unfortunately true that men make more money than women on average, women have reached a breakthrough when it comes to their 401(k) accounts. The number of women who have reached $1 million or more in their retirement savings has doubled during the past 12 years. Senior Vice President at Fidelity Investments, Jeanne Thompson, mentioned that this is because more and more women are taking control of their financial life and heavily contributing to their 401(k) by putting aside an average of 24.9% of their annual income. In comparison, men only put away 22.8%. This is a great stride for working women.
Men, however, continue to hold larger account balances in general. This is likely due to the fact that women make less money than men and often have to take time off from work to raise children, take care of elderly parents, etc. But, with more and more women joining the workforce and dedicating themselves to their careers, hopefully, their retirement accounts will grow comparably to men’s retirement accounts.
So how could you become a millionaire by the time you retire? You need to keep saving and investing over a long period of time. For example, by investing $18,000 annually for 20 years, your account could grow to $662,140.64 (assuming a 6% rate of return). That’s impressive! Make contributing to your 401(k), up to the maximum ($18,000 or $24,000 if age 50 and over) a habit. Unfortunately, your 401(k) isn’t going to reach $1 million overnight. But, with time, dedication, and consistent saving habits, you could be one of many women to reach this great milestone.
If you have questions about your 401(k) contributions or need retirement planning advice, give us a call today! We are always here to help.
The New York Times, Milestone for More Women: A 401(k) Worth $1 Million, November, 25, 2017
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