In many workplaces, the average tenure and compensation are greater for men than for their female counterparts, and that disparity can create even greater need for women to begin saving early. The good news is that by having a sound retirement plan, women should be able to achieve long-term financial comfort.
Benefits and Beneficiaries
Understanding your finances and the retirement benefits at your disposal, whether you are single or married, is the first priority. Another important step is to pay off all debts. Women should take steps to determine whether their own employer or a spouse’s employer offers a tax-deferred savings plan like a 401(k). Many employers have a matching program, which is essentially free money. Be sure you and/or your spouse designate beneficiaries. Pensions can be a vital part of a retirement plan, and often employers have specific rules regarding eligibility. It’s not safe to assume eligibility at a certain time or for a certain level of payout, without first consulting your employer.
Get Expert Advice
A financial planner who is knowledgeable about the broad array of savings, investment and other retirement vehicles available in the marketplace can advise you on the best strategies for your unique situation. A planner will most likely suggest that you take steps to diversify your investments and can also help you gauge the realistic estimated value of those investments over time—another critical area for consideration.
As you near retirement, a planner can help you consider how you will manage payouts from your pension, savings, investments, 401(k), IRA plan or annuity, and you will also want to calculate what you will receive in the form of Social Security payments. Also, it’s important to understand whether or not you may receive benefits in the event of a spouse’s death or serious injury. Life insurance, disability income insurance or long-term care insurance policies can facilitate needed financial protection.
Once you have a grasp of the funds that will be available upon your retirement, you can begin to gauge how soon you can comfortably ease into retirement, or viewed the other way around, how much longer you may need to continue working. If you consider a job change, determine how that could affect eligibility for your employer’s pension plan and 401(k).
Maintaining your investments during retirement is as important as saving before retirement. You’ll need to account for how much your expected living expenses will be, the rates of return on your investments and the effects future inflation will have on your pool of funds. An advisor can help you make sure that nothing is left to chance. In addition, community education programs, public access television and Mountain America often offer free seminars to help you prepare for a successful retirement.
This article is sponsored by Mountain America Credit Union.