Guest Blogger: Patricia Sanders
Across all age groups, women find it extremely difficult to save for retirement. The reasons are many. Most women lose the chance to contribute to a retirement plan as they take time off to raise children or care for aged members in the family. In addition, they earn less than men due to the significant wage gap in our country.
According to a report of the National Institute on Retirement Security, more women face financial difficulties in retirement than men. The report also indicates that women aged 65 and older have less income (25% less) than men their same age. In our country, men get a 44% more income advantage by the age of 80 than women.
The divorced, widowed, or single woman can easily fall into poverty in their retirement. Often, they retire with debt or accumulate debt in their retirement due to no or less savings. However, according to financial experts, women can change the scenario by planning their finances wisely.
Financial experts advise that women should plan wisely as they age. They also suggest that instead of accepting poverty, women should find out ways to get out of their debt. While it may be true that you can’t change the gender gap issue when it comes to earning and saving money; you can change the financial scenario in your retirement by following some wise strategies.
There are some ways you can pay off what you owe even in your retirement.
Here you go:
- Assess Your Debts:
First, assess the type of debts that you owe. If you have multiple unsecured debts like credit cards, private student loan debt, and other personal loan debts; make a list of them.
- Create A Budget To See Your Net Worth
Now, you should create your own budget where you need to put your total monthly income and expenses to see the net worth. Subtract the total expenses from your total income.Hopefully, the result is positive. Because the positive number is your net worth. You can use the net worth to repay your existing debts.
You can follow an online budgeting tool or an online budgeting spreadsheet to get your net worth.
- Consolidate Your Unsecured Debts
You can take out a consolidation loan to repay all your unsecured debts. It is a good way to manage multiple debts. You just need to manage one new loan (consolidation loan) that you have taken out. However, you should try to get a consolidation loan at a lower interest rate.
If you find it difficult, then you can enroll with a debt consolidation company to consolidate your debts. Once you enroll in a debt consolidation program, you just need to make one single payment every month until the debts are paid off.
- Settle Your Debts
If the debt amount is huge, and you can’t repay all the debts, then you can settle your debts to get out of debt easier. Though you can settle your debts on your own by negotiating for a lower amount to the creditors or collectors, enrolling with a settlement company increases the chance of a successful settlement. You just need to enroll in a settlement company. The negotiator will assess your income and approach your creditors to reduce the total debt amount. In most cases, they successfully reduce the debt amount. The debtor (You) needs to pay an amount every month to the settlement company and the company distributes the amount to the creditors.
- Follow The Debt Snowball Method To Repay Debts On Your Own
By following the debt snowball method, you can repay your debts on your own without enrolling with a debt relief company.
First, you should learn how the debt snowball method works.
In the debt snowball method, you need to arrange your debts from the smallest amount to largest. You need to make larger payments to the smallest debt while making minimum payments to the other debts. Once, you repay the smallest debt, target the next smallest debt in the list and start making bigger payments. Don’t forget to make minimum payments to the rest of the debts. Keep following this method until all the debts are paid off.
- Cut Down Extra Expenses To Set Aside More Money
However, to repay your debts, you should have enough money in hand. Thus, you should cut down extra costs to set aside more money. It will help you to repay debts and get out of debts faster.
- Use Your Retirement Savings
Though you shouldn’t use your retirement savings to repay debts, it can be your last resort to get out of debt in retirement. If you are carrying higher rates of interest and losing money over time; then you can take out a loan from your 401(K) to repay your debts. Make sure you can repay the loan within the time to ensure the full benefit.
- Adopt A Humble Lifestyle
In retirement, you should avoid the hassle of maintenance of a bigger home and multiple cars. Try to downsize your lifestyle to save more. Moving into a smaller home and selling an extra car can help you to save more money. You can repay your debts by using the money.
If you don’t want to sell your home, you can rent a portion of your home to earn money. You can use the money to make payments on your home loan as well. In addition to this, you can sell your car to repay the car loan. Also, you can rent the garage to get extra bucks every month.
- Look For Ways To Boost Your Income
Cutting down unnecessary expenses and downsizing your lifestyle can be good ways to get out of debt in retirement. But you can give the debt repayment process a boost by earning some extra money. If your health permits you to work again, you should join the workforce.
If you are not able to do a 9-5 job, then you can accept part-time jobs that you can manage from the comfort of your home. Search online to get job ideas that you can do in your home to earn extra money.
Lastly, it is true that women put their own financial future last. They prioritize their child’s education over their own retirement. Sometimes, they work in their family business for less or no pay. And, the never-ending wage gap doesn’t let them save enough money to secure their financial future. A divorced, a widowed, or single woman struggles a lot to survive in her retirement.
Ideally, women should learn the financial lesson at a young age to change her financial fate. She should learn how to manage money so that she can save a significant amount for her retirement. She should participate in her workplace savings plan. The proper financial lesson can help her avoid debt and to get out of debt easily.
These are some ways women can enjoy their golden age without fighting with debt.
About the Author: Patricia Sanders is a financial content writer. She has been praised for her effective financial tips that can be followed easily. Her passion for helping people who are stuck in financial problems has earned her recognition and honor in the industry. She is now associated with debtconsolidationcare.com. Besides writing, she loves to travel and read various books. To get in touch with her (or if you have any question regarding this article) email her at [email protected]