Planning for retirement is of paramount importance to ensure a secure financial future. Sadly, retirement prospects can be “pretty bleak” for women, according to CNBC.
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For example, U.S. Census data showed that about 50% of women ages 55 to 66 have no personal retirement savings, compared to 47% of men. Just 22% of women who have retirement savings have $100,000 or more, compared to 30% of men.
The biggest reason for these disparities? The gender pay gap still exists today.
Women Still Earn Less Than Men
One of the main reasons that women have less retirement savings than men is that women earn less than men. On average, women earn just 82% of what men do. That figure has remained relatively consistent over the past 20 years, according to Pew Research Center.
This 18% gap in pay makes it much harder for women to build robust retirement savings compared to their male counterparts. To make matters more complicated, women are typically the ones who leave work to be caretakers for children or aged relatives. They also live longer than men, meaning that amassing more retirement savings is crucial.
While it is more difficult for women to save and prepare for retirement, there are several ways to get ahead and stay on track.
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How Can Women Build Retirement Savings Quickly?
Here are five ways to catch up on retirement savings in a hurry:
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Cut Back On Unnecessary Expenses: An easy way to catch up on retirement savings is to cut back on unnecessary expenses. Whether it’s eliminating your morning cup of coffee from your local cafe, packing your work lunch several times per week instead of eating out, or taking one less vacation per year, small changes can mean a lot of money back in your wallet. Be sure to allocate these savings towards savings and retirement accounts.
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Enroll in 401(k) Contribution Auto Increases: If you’re enrolled in an employer-sponsored 401(k) plan, be sure to elect for annual auto contribution increases. Many plans offer an option where your monthly retirement plan contribution increases by 1% annually. Not only will you not have to think about it, but if you get an annual salary increase (or a promotion), you won’t even feel the decrease in your take-home pay. Meanwhile, your retirement fund will grow even further.
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Budget Aggressively: This goes without saying, but budgeting aggressively is key to reducing your monthly expenses. Calculate how much you need to pay your necessary bills such as your mortgage or rent, utilities, groceries, medical bills, etc. Then, see how much is left and be sure to allocate a significant portion of the balance towards your retirement before spending on extras like dining out, vacations and entertainment.
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Ask for Raises: Sometimes, asking for a raise is the only way you’ll get one when you need (or deserve) one. An increase in your take-home pay now means extra cash you can allocate toward your retirement fund. The sooner you can contribute more to your retirement, the more your balance will grow thanks to compound interest.
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Get A Side Hustle: In addition to your full-time job, consider taking on a side hustle in your spare time. This can be anything from babysitting, pet sitting, dog walking, being a rideshare driver, etc. Supplementing your monthly income will allow you to give a boost to your retirement savings, growing your wealth even further.
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This article originally appeared on GOBankingRates.com: 50% of Middle-Aged Women Have No Retirement Savings — 5 Ways to Catch Up Fast