If you are over 40 and have your retirement plans where they need to be, consider yourself fortunate. You are certainly above the fray, in this area. Black women have made amazing headway in positions of power in the workforce. However, we still are behind other demographic groups in saving what we need to sustain ourselves in our golden years.
Disparities For Women and Minorities in Retirement Savings
“Few black households, however, have incomes that place them in the top 10 percent of all Americans. In fact, black households that are in the top 10 percent of income among other black households have substantially lower income and lower net worth than those in the 10 percent of the U.S. population ($257,500 compared to $708,000). Comparing liquid wealth, such as financial assets, the typical black household at the top of the African American income distribution has no more than one-eighth the assets of typical rich household. Accordingly, African Americans who may very well consider themselves rich relative to their peers still lag far behind many other U.S. households when entering retirement.”
Suze Orman is a world-renowned personal financial guru with many years of experience helping real people. Her advice to the 40-year-old single woman in the video below is eye-opening to me for two reasons.
- She recommends a 300-400K net worth at age 40 Fidelity suggests a person that is 45 years old should have 4 times their salary saved for retirement. A salary of $50,000 would need $200,000 in retirement to meet this suggestion, with an additional 100-200K in net value to meet Suze Orman’s recommendation. In any demographic and at any salary, that’s quite a sum of money.
- She urges creation of must-have documents As part of her advice for this caller to go from an F score to an A, the first thing recommended is the creation of a will, trust, advanced directive, etc. These recommendations were specifically because she is a single woman. Financial health isn’t just about having your money in order. It’s also about protecting what you’ve amassed in the event of catastrophe.
Correcting retirement savings mistakes after 40 can seem daunting, but with some aggressive planning and saving, our goals can be accomplished. No matter how far behind you are, it’s never too late to start.