Great article from the July 26, 2013, Wall Street Journal Market Watch online edition on the steps women should take to prepare for retirement.
Women have a unique set of retirement planning needs. Often, they are caretakers to family members and tend to live longer than their spouses, which requires careful retirement income planning to make their money last.
It is important for women to educate themselves about their options and take control of retirement planning.
According to WISER- Women’s Institute for a Secure Retirement, some of the top challenges facing women retirees:
- Half of all women work in traditionally female, relatively low paid jobs without pensions Women retirees receive only half the average pension benefits that men receive.
- Three out of five working women earn less than $30,000 per year. Three out of four working women earn less than $40,000 per year.
- Over a lifetime of working, women earn an average of 77 cents for every $1.00 earned by men – a lifetime difference of over $300,000.
Taking the time to research what you’ll need for retirement and taking charge of your retirement income planning is critical to achieving retirement security.
Here are four important steps to help you get started:
- Start now to educate yourself about your finances, including any pension benefits, Social Security, or Medicare costs. Knowing where you stand is
critical in making the right choices for the future. The sooner you begin; the better off you will be in avoiding unwanted surprises when you are ready to retire. - Find out what you can expect from various sources of retirement income, including retirement accounts like an IRA or employer-sponsored 401(k), or
Social Security. Make sure to take into account inflation and other factors such as rising health care costs or investment rates of return. - Learn as much as you can about annuities, mutual funds, IRAs, and long-term care insurance. Take classes on finances and investing, read up on the subject,
and consult with a financial planner to help you make the right choices on how to invest wisely. - Take full advantage of employer-sponsored 401(k) plans and maximize your savings through matching employer contributions. The earlier you start, the more your money will grow. If you are over age 50, you can also make “catch-up” contributions to save even more.
With careful planning and financial knowledge, women can choose the best investment and retirement savings options that allow them to enjoy a secure retirement future.
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