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Women & Retirement: Conquering The Fear of Investing

Definition of Fear:
An unpleasant emotion caused by the belief or anticipation that someone or something is dangerous, likely to cause pain or harm, or a threat.

Many women are fearful toward investing — especially if they are unfamiliar with the concept, as the fear of potentially losing money often takes over. What if I lose it all? I don’t know what I am doing. I lost a lot of money during the Great Recession, and it was painful.

But the reality is that women who maintain this mindset are still losing — they’re losing buying power due to inflation. Your money today will not be worth as much in the future, and due to the lack of pensions and an unpredictable social security outcome, the only way to build a solid retirement nest egg is to invest.

I recently read two articles about two highly respected economic professors who have differing views on their potential for retirement success:

Professor One: She stated that her employer required she save 5% of her salary, and they then matched 10%. If she didn’t have that, she said she wouldn’t feel as secure about her retirement. Therefore, she believes that all employees should have a mandatory 5% of salary set aside towards retirement. I agree with that sentiment.

Professor Two: She admitted to major mistakes made throughout her career regarding her retirement, such as spending her pension and owning a home she couldn’t afford. She controls her expenses in a variety of ways, from setting monthly household budgets to monitoring internal management fees on investments. She also said that if it weren’t for her son, she would keep her savings hidden under the mattress. All because she has a fear of investing and worrying if she will do the right thing in regards to her finances.

Both articles left me disturbed by the fact that many women simply don’t seem to have the self-discipline and proper knowledge to make conscious decisions in regards to retirement. Why aren’t more of us in a better position and mental state regarding our finances? The likely reason is because we’re scared… but all it takes is that first step. And just like a child learning to walk for the first time, it gets easier once you get started.

Luckily, here are a few steps to help conquer that fear of investing:
• Start contributing to retirement early — a minimum of 5% of your salary
• Select mutual funds within your 401(k) or 403B that have low fees
• Hire a financial planner to keep you informed and push you out of your investment comfort zone
• Study your options and take risks when you are younger
• Regularly monitor your lifestyle choices and stay within your budget
• Increase your contribution percentage by at least 1% with each raise

Ladies, I’m here to tell you, investing is a journey. It takes time and mistakes will be made. External factors such as the political landscape, world events and the economy can all affect your investments and their performance. But understand that you will feel all the more confident if you’re equipped with proper information and a solid investment plan.