Preparing for retirement requires intentional, careful planning, and this is especially true for women. Women can face unique challenges in their retirement years, as they are more likely to live longer than men.
Women are also more likely than men to take time out of the workforce to care for children or aging relatives. As a result, this can reduce their retirement savings by 35%. Recent surveys show that 50% of women say they are behind on their retirement savings, but they are 61% more likely than men to retire early.1
What should women do to make sure they are prepared to retire and receive a comfortable income? Here are four steps to take to stay ahead:
Have regular conversations about finances. If you have a spouse or partner, have candid conversations about money. Make sure your family has an estate plan with the correct beneficiaries in place. Work together to set goals to make sure you are both aligned on spending, saving and investing. The more comfortable you are with talking about finances, the more confident you will be when it’s time to make big financial decisions together.
Start saving and investing early. It’s never too soon to invest in your future. The earlier you start, the more you benefit from compound interest – meaning the longer your money can grow, the more you’ll accumulate for retirement. Make room in your budget today for investing and saving, and you’ll reap the rewards when you need it most.
Take advantage of employer-sponsored retirement plans. This may be one of the easiest ways to save. If your employer offers a 401(k) or IRA, enroll and contribute at least enough to receive any company matching funds that may be available. Your contributions are tax-deductible, and the money in these plans grows tax-free until you withdraw it in retirement.
Seek professional advice. While there is a lot you can do on your own, nothing compares to the financial confidence that comes with having a professional advisor by your side, helping you reach your goals. An advisor can help you think through and plan for every possible scenario, including divorce, death of a spouse or long-term care insurance.
While women face different challenges in retirement, reaching your financial goals is achievable with the right strategies. Contact us to learn more about our holistic financial planning services and see what retirement can look like for you.