On average, women should have 11.6 times their last annual salary saved by age 67 in order to retire, according to Aon’s analysis.
However, based on current savings rates, they’ll only have an average of about 7.6 times their salary saved by that age. They’ll face a steep shortfall.
In order to beat that hurdle, female workers will need to either defer their retirement or save more money during their working years.
There are different approaches to saving up that money.
Aim to contribute up to 15 percent of your salary each year in your 401(k), said Ramnani.
Also, consider working with a financial planner who can help you figure out how much you need to have saved by the time you retire, she said.
“You should estimate how much your expenses are going to be for each year of retirement, and work backwards to see how much you’ll need at the beginning of retirement,” said Ramnani.
This will give you a sense of how much you need to save each year in order to meet that goal.
Finally, saving is only part of the equation. You should invest that money so that it grows over time.
“Women tend to shy away from investing, but keeping the money in a bank account will not make it grow the way you need it to grow,” said Ramnani.
Your workplace 401(k) will give you a good start, she said. Your contributions are made on a pretax basis, and they grow tax-deferred until you retire and it’s time to withdraw the money.
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