To achieve the retirement you desire, it’s critical that you take an active role in your financial planning. As women, we often face unique challenges when it comes to retirement savings. However, by recognizing these challenges and taking proactive steps, we can overcome them and retire with confidence. In this article, we will explore two important aspects: women tending to have less wealth at retirement and despite having greater retirement expenses. By understanding these factors, we can better prepare ourselves for a secure financial future.
Women Tend to Have Less Wealth Come Retirement…
It’s unfortunate but true that women often have less wealth accumulated at retirement compared to men. Various factors contribute to this disparity, including the gender pay gap, interrupted careers due to caregiving responsibilities, and a higher likelihood of working part-time. Recognizing this discrepancy allows us to take action and make informed decisions to bridge the gap.
…Despite Having Greater Retirement Expenses
In addition to having less wealth, women also tend to face higher retirement expenses. Women typically live longer than men, resulting in more years of retirement to fund. Longer life expectancies mean a greater need for savings to cover healthcare costs, long-term care, and other expenses. Understanding these greater retirement expenses empowers us to allocate resources and plan accordingly.
Start Early and Be Consistent
One of the most effective ways to mitigate the challenges women face in retirement is to start saving early and consistently. The power of compounding works in our favor when we give our savings more time to grow. By establishing a habit of saving and consistently contributing to retirement accounts, we can build a solid financial foundation for the future.
Maximize Any Employer-Sponsored Retirement Plans You Might Have
Take advantage of employer-sponsored retirement plans, such as 401(k)s or 403(b)s, and contribute as much as possible. These plans often offer employer matching contributions, which is essentially free money. By maximizing your contributions and taking advantage of these benefits, you can supercharge your retirement savings.
Diversification
Investing strategically is key to building wealth for retirement. With the help of a Wealth Management professional, you can allocate, or spread, your investments across different asset classes for the purpose of reduce risk and increasing potential returns. No matter your end goal, the purpose of a Wealth Manager is to help you create an investment strategy that aligns with your risk tolerance, goals, and time horizon.
Prioritize Retirement Savings in Your Budget
Make retirement savings a priority in your budget. Analyze your expenses and identify areas where you can cut back to allocate more funds towards retirement. By prioritizing savings and making conscious spending choices, you can increase your retirement nest egg over time.
Get Educated / Seek Guidance
Educate yourself about all things retirement planning and financial management! The more knowledgeable you are, the better equipped you’ll be to make informed decisions. Additionally, consider working with a Private Wealth Manager who specializes in Retirement Planning. Wealth Management professionals such as those here at InVestra work to provide personalized guidance, help individuals navigate complex financial matters, and develop a comprehensive retirement plan tailored to to individuals’ specific needs.
Education is Empowerment
To retire with confidence, it’s crucial to take an active role in your financial planning beginning with learning all of the ins and outs. Recognize the challenges we face as women, start saving early and consistently, maximize employer benefits, diversify your investments, prioritize retirement savings, educate ourselves, and seek professional guidance. By empowering yourself through education and taking proactive steps, you can do more with less and secure the retirement life you deserve – Hello dream car!
The Bottom Line
Achieving what you desire will require active engagement and comprehensive planning. While women undoubtedly have extra challenges to overcome when planning and saving for retirement, research has shown that when they are educated on money and investing, they tend to be better investors than their male counterparts. So why is it that only 17% of us express a high level of confidence in our ability to retire comfortably? And why do over one-third of younger affluent women fear running out of money? (Transamerica, 2022).
The path to retiring with confidence and leveraging your advantages for a secure future is similar to achieving any significant goal. It involves understanding your current situation, defining your desired destination, and finding the best path to get there. In the following section, we will explore the journey of assessing your financial readiness for retirement, acknowledging the advantages you possess, and overcoming the obstacles you may encounter.
Consider what potential unforeseen circumstances that may arise in the coming years. How prepared are you to address health concerns that often accompany aging? If you are married, consider the possibility of divorce or widowhood and how it might impact your financial situation. Now is the time to equip yourself with knowledge and build confidence, ensuring that you can stand independently if the need arises.
Evaluate your financial readiness for retirement while taking into account the unique aspects of your life. Recognize the strengths you bring to the table and identify areas where you may need additional support. Understanding your financial landscape, setting realistic goals, and working with a Private Wealth Manager or team of financial professionals to develop a solid plan are three critical steps towards retiring with confidence.
Additionally, seek opportunities to enhance your financial literacy and gain a deeper understanding of retirement planning however and whenever possible. Recently, InVestra Financial’s founder and president, Erin D. Eiras, CPFA, served as a panelist at the 2023 Wealth Networking Conference here in Jacksonville where she shared insights and strategies for achieving wealth and success with local attendees.
In conclusion, retiring with confidence requires a combination of self-assessment, planning, and ongoing education. Recognize the challenges that may lie ahead, but also embrace the advantages and opportunities available to you. By preparing for unexpected changes, continuously expanding your financial knowledge, and seeking professional guidance, you can retire with confidence and enjoy a secure future.
Important Disclosures:
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. Please keep in mind that insurance companies alone determine insurability and some people may be deemed uninsurable because of health reasons, occupation, and lifestyle choices. Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.
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