For many women around the world, having retirement plans comes with multiple obstacles. Often, these obstacles come in the form of using their retirement funds beforehand. Withdrawing the money to save your family from a sudden need may cost you in the long run.
The prevailing cultural, systematic, and legal drawbacks make saving for retirement much more difficult for women. Especially when that savings becomes a slush fund for various needs. Ultimately, this can result in you drowning in debt.
From the story of Vickie Elisa in The New York Times, we can see a similar situation. Vickie had to withdraw $17,000 to fix a plumbing disaster in her home. Using the Roth IRA for multiple needs soon became a disaster for her in return. Because replenishing the account continues to be an uphill battle for her.
This can become a nightmare for her family and herself as well when she retires within a few years. This is why financial experts put so much emphasis on proper money management for people, especially women.
To help you deal with this situation, the following steps can be beneficial and necessary.
Get Perspectives: When a crisis arises in your family, it is natural that your emotions will kick in. Often, letting your protective senses control your finances can cost you in the long run.
Women need to recognize their emotions and take a moment before making decisions. At the same time, you must consult with a financial advisor or retirement consultant. It will allow you to get a different and strategic perspective on your situation. So, you will be able to make better decisions.
Implement Strict Boundaries: Planning and managing funds for retirement works differently for women than it does for most men. Having to juggle the expectations of a caregiver and managing financial decisions becomes more challenging.
Often, your family may choose your retirement fund as a default financial backup in times of any crisis. There may also be pressure or influence on you to use your retirement fund for any needs. So, to tackle those situations, women must set strict boundaries on their retirement funds. This will allow them to have better control over their finances.
Share Responsibilities: As we learn from the situation above, the responsibility to deal with a crisis often comes to women. Which creates the situation of having to use their retirement funds.
You can prevent such a scenario from arising by sharing your responsibilities. Communicate and collaborate with your family in times of difficulty. There should be equal participation to neutralize the need. So, by sharing responsibilities, you can prevent your retirement funds from dissolving so early on.
Create Separate Emergency Fund: Another thing that can help women to keep their retirement funds intact is to have a separate emergency fund.
By creating a separate emergency fund, you can keep your 401(k)s and IRAs discreet. Hence, when you need money, you and your family can use the emergency fund. This will also allow your family members to chip in on the fund efficiently. So, dealing with a crisis will become easier.
Set Payback Periods: The payback period is the minimum time by which a taken amount can be recovered. This can be an important tool for your retirement funds.
So, next time you have to take money from your retirement fund, you can pay it back too. Having a payback system allows you to keep your retirement fund safe and secure.
Saving for your retirement may be a challenging journey. But with the right guidelines and perspective, you can turn this battle into a favorable situation. To share your thoughts on this, make sure to join our forum. Register now to become a member to join the movement
