45% of women worry that their savings will not be enough. Here’s how to create a large enough nest egg to reduce the chances of that happening.

Women have traditionally made less money than men, so it’s not particularly shocking that women are less confident about retirement than men. This is according to a late 2023 report from Northwestern Mutual. But women’s top retirement concerns are closely tied to those of men. And for 45% of women, short-lived savings are a major source of stress.

If you’re worried about running out of money in retirement, it’s important to know that the more you save from the start, the less likely you are to run out of cash. So with this in mind, it’s important to commit to saving for retirement from the beginning of your career until the end.

The higher the number, the more power

Let’s look at one thing that doesn’t get in the way. Unfortunately, a single savings goal doesn’t guarantee you won’t run out of money in retirement. The risk of depleting your nest egg largely depends on how well you manage your retirement savings (or not).

If you make random withdrawals and set a safe withdrawal rate instead of crunching the numbers, you could deplete your $2 million Individual Retirement Account (IRA) faster than someone else’s $500,000 savings balance.

But generally speaking, it’s fair to say that if you retire with $2 million, you’re more likely to be out of money than someone with just a quarter of that amount. Therefore, it is best to try to save as much as possible.

Slow and steady will give you great results

One challenge women may have, especially when it comes to retirement savings, is finding money to save. As mentioned earlier, women tend to earn less than men, which can make it more difficult for them to save. But if you want to retire with plenty of money, you actually need to do two things.

1. Save for retirement regularly throughout your career.
2. Invest your savings in the stock market to earn high returns.

Many people don’t start saving for retirement until they are in their 30s or 40s, sometimes older. However, if you want to make good money, it is much better to start saving into a retirement account in your 20s when you have a steady salary.

Moreover, investing in stocks carries risks, which you certainly do not. guarantee History has shown that people who stick with the stock market for decades to make money in stocks tend to make money. Sometimes you can make a lot of money.

The average annual return on the stock market over the past 50 years has been 10%. If you can get returns like this from your portfolio, you’ll find that your monthly contributions to your retirement plan can go a long way over time.

Let’s say you earn 10% in your IRA or 401(k) and you save $400 per month between ages 25 and 65. After 40 years, you will have a balance of over $2.1 million. And while there’s always a chance you’ll run out of a large sum of money in retirement, if you’re careful with your withdrawals, it’s more likely that your money will last as long as you need it.

It’s natural to worry that your savings won’t last long after retirement. But the more money you have, the less likely you are to worry.

But at the same time, plan to work with a financial advisor before retirement to develop a smart withdrawal plan for your savings based on factors like market conditions and how you invest your nest egg. This can give you greater confidence in your ability to prevent your savings from depleting throughout your life.

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