Well-known financial expert, Shelly-Ann Eweka shared gems on how you can narrow the gap in your retirement savings in a recent Masterclass to the BAUCE squad.
Eweka has worked across numerous divisions but now serves as Senior Director at TIAA (The Teachers Insurance and Annuity Association of America-College Retirement Equities Fund) which furthers conversations and helps with retirement planning and getting your finances in order. They service clients who are in higher education, public institutions and the medical field. She has shared her expert advice on CNN, MSNBC, USA Today, and the list goes on.
Equity and Gender
It’s 2022, and women still earn less than men. Shelly-Ann Eweka stresses that the situation is worse for women of color with Black women earning 63c to the dollar when compared to their white counterparts and Latino women earning 53c to the dollar. In total, this is about $400,000 worth of income lost throughout one’s career. There are various reasons for this such as differences in the level of employment and unequal pay rates. These disparities begin to show when it comes to retirement as Eweka states: “women generally tend to retire two years earlier than men.”
Strategies to close the retirement gap
Sign up for a retirement plan
“Make your retirement a priority” stresses Eweka. Some employers offer a retirement plan match where if you put 3%, they can match 3% as well. She also reminds us that there are self-employment plans depending on how much you earn. She recommends working with an accountant to see how much you should be putting away. “Don’t wait, start now” is her advice with 10-15% being ideal to put away.
Pay yourself (savings) first and use whatever you have left
Craft a budget and then make your retirement savings automatic where you can set it and forget it. There will always be expenses but it is important to articulate your financial goals and be intentional about investing in your future.
Have control over your finances
She recommends TIAA’s 360° Financial View which helps you see all your accounts from TIAA and more than 17,000 other banks, brokerage firms, retirement plans and other data sources. Combining these accounts provides a complete picture of your finances: your net worth, your investment allocation and your total spending. You will be surprised you might be eating your paycheck with all those takeaways. Or sometimes you might be spending money on things you don’t enjoy. You can also calculate the best ways to pay off your debt. She stresses taking back control of where you put your money and ensuring it is in something that will pay off in the future.
Get a financial adviser
Getting a financial adviser helps you understand what your goals are, how much money you need to put aside and how to properly invest to meet your goals. Eweka debunks the myth of needing a lot of money to get a financial planner. She shares that she has a financial planner and if she has one, everyone else should invest in one. They will also help ensure you have all the appropriate classes you need in your investment portfolio e.g stocks and ensure you are on track to a secure and happy retirement.
How do you know you’ve saved enough?
She shares a calculator tool on the TIAA vision on track website where you can track how much you need to save depending on your age, whether you are on track and how much you should be putting towards your retirement.
How much should you earn before you put money aside for retirement?
“Start small” is Eweka’s advice. For self-employed BAUCEs who might earn $50k for example, she says you can start with 10%. It is better to always start, as you are investing in the future of that business. “You don’t have to understand it now, you just have to accept it, and trust that over time all those compounded savings add up and pay off,” says Eweka. It is also beneficial to create an estate plan which creates a safe future not just for yourself but for your loved ones, not just with money but with important decisions such as healthcare.