Helping Women Prepare for Retirement
May. 24, 2016 Whitepaper

Life Transitions: Helping Women Prepare for Retirement

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It’s a well-known fact in the financial planning field that women frequently don’t save enough for retirement. 

The consequences of not planning for retirement can be devastating for women, especially when something unexpected occurs, such as a divorce or the death of a spouse. Given their longer lifespans, women are often left to support themselves in retirement, without a spouse to assist. So, how can a woman ensure she has enough to retire comfortably?

I’ve been helping women answer this question for more than three decades. The answer is simple – save early and often. However, the application of this simple advice can be difficult. What’s the best method of saving? What if you didn’t start saving early, is it too late? How much will you need in retirement? How much should you be putting away?

While my advice varies based on each woman’s specific financial situation and objectives, I’ve found the following tips to be a good start toward helping women plan for retirement.

Women Planning for Retirement

1. START EARLY AND HAVE A PLAN.

A runner preparing for a marathon doesn’t begin training a week before the race. Preparation is key. It’s important to have a financial plan that includes specific retirement goals and to begin working toward those goals as soon as possible. Develop monthly saving targets and stick to them. While it may be difficult in the short term to make sacrifices to save, small changes today can add up to big savings in the future.

2. BE INVOLVED.

In a marriage, spouses often need to divide responsibilities in order to accomplish everything necessary. However, financial planning should be a shared task. Too often, I work with recently divorced or widowed women who delegated all financial responsibilities to their spouse and are overwhelmed when they find themselves suddenly solely responsible for their financial well-being. Be sure you understand your financial picture, where your accounts are held and how to access those accounts. It is also important to know your household income and spending habits, where any legal documents such as trusts and wills are held, and any insurance policies that may apply.

3. FACTOR IN YOUR PRIORITIES.

Planning for retirement is more than saving. As you plan for the future, it’s important to cover all your bases. I recommend the following:

  • Set up a will.
  • Ensure you have adequate insurance, both health and life.
  • Set specific goals related to other savings priorities – college education for your children, supplemental income and/or disability insurance should you or your husband be out of the workforce for a period of time, additional savings should you be concerned about taking care of aging parents, etc.
  • Don’t forget about healthcare. If applicable and available, establish a health care savings account (HSA) to help you save more.

4. ESTABLISH YOUR OWN FINANCIAL IDENTITY.

Don’t count on your husband’s 401(k) for your retirement savings. Maximize your annual contributions to your 401(k) account, if possible, or establish an IRA in your name. If you inherit money from a family member, leave it in your name. Having your own savings, separate from your husband’s and family’s accounts, helps ensure an adequate income stream, even when unexpected events occur.

5. REVISIT YOUR FINANCIAL PLAN AND SAVINGS GOALS REGULARLY.

Saving for retirement isn’t a set-it-and-forget-it strategy. As your life and financial circumstances change, it’s important to check in on your retirement goals to ensure they remain on track. If you’ve experienced setbacks, it may be necessary to step up your monthly savings goals. If you’ve encountered a life event, it could be time to revisit your objectives. Working with a financial advisor to discuss your goals and develop retirement projections can help you stay on track over the long term.

When working with women to plan for retirement, my goal is to help them become educated and empowered. I understand the prospect of planning for retirement can be overwhelming, but with the proper discipline and long-term plan, you can achieve your personal retirement goals.

 

This document is for informational use only. Nothing in this publication is intended to constitute legal, tax, or investment advice. There is no guarantee that any claims made will come to pass. The information contained herein has been obtained from sources believed to be reliable, but Kaiser Hoffman does not warrant the accuracy of the information. Consult a financial, tax or legal professional for specific information related to your own situation.

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