By Megan Sayles, AFRO Business Writer,
Report for America Corps Member,
Shelly-Ann Eweka has worked at the Teachers Insurance and Annuity Association (TIAA) of America for over 15 years. Founded in 1919, TIAA was established to help improve quality of life for teachers. Today, it’s a Fortune 100 financial services company and serves more than five million clients by helping them prepare for retirement. Eweka serves as the senior director of financial planning strategy there.
Recently, TIAA spearheaded a #RetireInequality movement, which calls attention to the gender retirement income gap. Women earn 82 cents on the dollar compared to men, and when they leave the workforce, they retire with 30 percent less income than men. The AFRO connected with Eweka to learn more about how women can prepare themselves for retirement. This conversation has been edited for length and clarity.
Q: How does the gender pay gap extend into retirement for women?
A: We know that women earn 82 cents on the dollar compared to men. Specifically, Black women earn 63 cents on the dollar, and Latina women earn 53 cents on the dollar. We still have this huge gap. It directly impacts retirement because if you’re earning less money then you have less cash flow to be able to put toward your retirement account.
Q: Outside of the fact that women are paid less than men, what else can hinder a woman’s ability to save for retirement?
A: Debt. There are a lot of people who are struggling with debt, and it requires payments. We also find that people are struggling with juggling various demands. Should I pay for college for my kids? How much should I put toward paying off my debt? How much should I be putting in my emergency fund? How much should I be putting in a retirement account?
What I recommend is that you work with a financial advisor or financial planner to help you so you’re not alone. A lot of companies that offer retirement plans also offer complimentary financial advisory services.
Q: What can women do to prepare themselves for retirement?
A: The first thing you do is pay yourself. If you work for an employer who does offer a retirement plan, it’s so easy. You just set up the automatic investment plan from your retirement account, and it comes right out of your check.
If you don’t have access to an employer plan, then you most likely can take advantage of an IRA or Roth IRA. You can still make it automatic so that money comes out from your checking or savings account each month and goes directly into your IRA or Roth IRA. That way you’re not living your life paying all of your bills and then, at the end of the month, trying to put the money you have left in your savings. That normally doesn’t work. People who do that usually don’t ever get started because they don’t have a lot of money left over.
If you pay yourself first and build your lifestyle around the money remaining, you are setting yourself up to be able to address that gap of not having enough income in retirement. The sooner you start to save, the more your investments are going to compound.
Q: When should someone start thinking about creating a retirement plan?
A: Today is when you should start. You may have a lot of goals, but they are not necessarily sequential. You have to work on them at the same time. You put some of your money toward retirement, some of it toward paying off debt, some of it in your emergency fund and some of it toward a down payment on a house or a car. That’s why it’s important to create a plan because it will tell you how to divide your paycheck and how to invest for your goals.
Help us Continue to tell OUR Story and join the AFRO family as a member – subscribers are now members! Join here!