There are a number of compelling reasons why women should be diligent about saving in a 401K or other tax deferred retirement plans:
On average, women live longer than men and need to plan for a longer retirement. They typically earn less and are single parents more than men. Women change jobs more often and spend on average 11 years out of the workforce. This contributes to lower pension funds and smaller social security checks in the future. Close to Fifty percent of all marriage may end in divorce and women will need to rely on their own funds for retirement.
It is never too late to start investing. With financial education and investment know-how, you can still have a wonderful retirement even if you start saving today.
Working towards financial stability can be based on a very modest income and saving can be easier than you think. It is how you grow your money that matters most. Everyone can afford to save some money with a little discipline and a goal in mind.
Here are a few financial steps to help you address your retirement future:
- Determine your risk level. Your financial advisor can provide you with a risk survey. The results of this survey will show your comfort level.
- Calculate how much money you will need to be comfortable in retirement. Be sure to factor in a longer life expectancy.
- If your workplace offers a 401k with matching benefits you should be taking full advantage of this benefit right now —this is free money!
- Know when your benefits vest (including employee match) and stay in the job long enough to gain this advantage.
- If you are considering changing jobs, look at the entire package. Making more money but giving up benefits such as retirement plans or health benefits may not be in your best financial interest. Keep in mind your health care benefits are not taxable and your retirement benefits are tax-deferred—this may be more valuable than an increase in taxable income.
- Continue to educate yourself about investing so that you may be more comfortable taking on more risk enabling you to grow your money at a higher rate. Do your own research, enroll in a class and consult with a qualified financial advisor.
Get started today and remember the money you save starting right now can help you maintain a healthy lifestyle when you retire.
Answers from AZ
The information provided does not constitute any tax, investment or legal advice. Do consult with your financial, tax or legal advisor regarding your own unique situation and plan specific to you.