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9 Tips to Improving a Woman's Retirement

Like many women, are you constantly juggling family, professional, and personal responsibilities? No wonder retirement planning seems to always get shuffled to the bottom of your “to do” list. But, procrastination is not the answer. Putting it off will only increase your risk of becoming one of a growing number of women who will spend their golden years struggling to make ends meet.


Saving enough for a comfortable retirement can be especially difficult for women who may, when compared with men, earn less, spend fewer years working, and live longer.  The average woman in the U.S. earns 80 cents for every dollar a man earns. In addition, women typically spend nearly 12 years out of the workforce while taking care of children or elderly parents. And to top it all off, women live, on average, five years longer than men.


So here's nine tips you can use to prioritize saving for your own financial future:


1.) Keep your maternal instinct in check.

Women are particularly vulnerable to giving too much of their assets to children. It’s not uncommon for me to see clients drain their retirement savings in order to help pay their 'little babies’ college tuition. However, remember that your children may qualify for financial aid or low-interest loans to help pay for college. There are no grants or scholarships for retirement. This may also include cutting off your adult children that always seem to find themselves in a bind too.


2.) Understand the family finances.

One of the toughest challenges I see widows immediately face after a spouse’s death is just trying to understand what they have and where it’s at. This is common when the husband took care of the family finances. Women must make sure they know what the family finances are even if their spouse is primarily handling them.

 Woman looking at the family's finances

3.) Avoid getting too much into debt.

Try paying off your mortgage and other debt as quickly as possible. Owning a house outright in retirement not only ensures that you will have a place to live, but it can also serve as a valuable source of equity, should you need it. To give yourself an incentive to pay off your credit cards, resolve to turn your monthly credit card payments into retirement account contributions, when the debt is paid.


4.) Plan to work longer if necessary.

A few extra years spent working may enable you to save more money for retirement.


5.) Consider delaying your Social Security benefits

...until you reach full retirement age or even longer. Your Social Security benefit grows 8% each year until you reach age 70. In addition, your health care costs may be lower if you postpone retiring until you qualify for full Medicare benefits.

Impact of Delaying Social Security Benefits


6.) Find the RIGHT company & participate. 

Research shows only 46% of women participate in their employer’s retirement plan. If your current employer does not offer a retirement plan, you should consider your options for securing better benefits elsewhere. Look for a company that at least offers to match contributions to a 401(k). Companies with a traditional pension plan are becoming increasingly rare, however, If you are lucky enough to be employed by one, find out what your benefit is likely to be and at what age you can collect the maximum benefit.


7.) Consider a Roth IRA in your long-term plan.

Contributions to Roth IRAs must be made with after-tax dollars, but potential earnings grow tax deferred. Qualified distributions made after age 59½ are income tax free, provided the account has been owned for at least five years. Certain income limits apply.


8.) Review your spousal benefits.

If you’re married, take a look at your spousal benefits to ensure they meet your future needs. Given the possibilities of divorce and widowhood, it’s essential that you plan for a time when you may have to manage independently. If you are staying at home while your spouse is working, set up an IRA in your own name. Also, determine your rights regarding your spouse’s pension in the case of death or divorce, and research the effects of divorce and remarriage on your Social Security benefits.


9.) Avoid spending too much on housing.

Housing is the greatest expense for most retirees as well as for households at all ages. People are often encouraged to buy as much house as they can with the theory that house prices go up. But they can also go down, and real estate taxes can go up. Keeping a large family home in a divorce settlement or staying after the death of the spouse or when children are gone is a common mistake women make. The upkeep and costs of maintaining a residence that is too large for your needs or does not fit with your current lifestyle needs is expensive. Retirees often find the cost of repairs to be a burden.

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About the Author:

Desmond Henry, a financial planner in Topeka, KS

Desmond Henry is a fee-only CERTIFIED FINANCIAL PLANNER™ professional and founder of Afflora Financial Life Planning in Topeka, Kansas. He helps  the retiring/retired plan their finances and invest their money. CLICK HERE to learn more.