Last week, we discussed various reasons why women are anxious about their financial security and stability as they approach retirement. Many women are unaware or are not taking full advantage of the opportunities available to them for planning and saving for their golden years. This week, we will review ways that women (and men) can improve their outlook for financial stability in retirement.
According to data compiled by the Social Security Administration, on average a woman turning 65 today can expect to live until age 86. One in four will live past the age of 90. With longer life expectancies for this generation compared to previous ones, women today need to strive for a financially secure retirement. However, based on results from the Annual Transamerica Retirement Survey of American Workers, 84% of women believe that they will have a much harder time achieving financial security during retirement compared to their parent’s generation.
It’s no wonder women are apprehensive about retirement. The good news is that with a little work and a few good tips, women can make significant progress towards their financial readiness for retirement.
Tips for improving retirement readiness:
Develop a retirement strategy – Don’t speculate about what’s needed for retirement. Work with a financial advisor to estimate benefits and long-term savings requirements. Consider any dreams or plans envisioned for retirement. Include things like travel, downsizing a home or moving to a warmer climate.
Start saving – Set a goal for how much money can be put aside each week or monthly for retirement. Save as much as possible – even small amounts add up over time. Hold yourself accountable.
Participate in workplace retirement plans - Join your employer’s retirement plan (e.g. a tax- deferred 401(k)). Take advantage of any matching contribution programs offered. Discuss with a financial advisor whether you should be participating in the IRS Saver’s Credit or making catch-up contributions.
Discuss family finances - Involve yourself in family finances – everything from daily budgets to long-term planning strategies. If you’re married, learn about your spouse’s retirement benefits and how they impact you. Discuss your expectations for retirement and what your savings needs will be.
Have a backup plan - Unforeseen events happen: divorce, loss of a partner, job loss, inability to work, etc. Have a contingency plan that includes emergency savings, insurance, and ways to reduce monthly expenses. Learn about retirement investing and ways to help make your savings stretch and last longer.
Still apprehensive? If you’ve read all the retirement readiness tips and still aren’t sure where to begin or you want to ensure that you’re on the right track for your retirement then consider working with a financial advisor. An experienced financial advisor can help you to assess your needs and priorities. Their knowledge of savings and retirement will make all the financial jargon and industry lingo less intimidating. Preparing for your retirement will encourage confidence for your future and your financial security.
Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.
"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.