A large number of women tend to earn less over their lifetime compared to men, as they take time off from work to raise a family. Hence, they also tend to save less than men for their retirement. Furthermore, women tend to live longer than men and this makes it all the more important that they save adequately for life after retirement. Saving sufficient money for retirement will give women peace of mind.
Here are 6 women-centric retirement tips that you can use to save for your golden years.
1. Start Saving Early
Even before you get married or have kids, it is time to start building your nest egg. When you are young, you will not think about retirement, as it will be a far away thought. However, the earlier you start building your nest egg, the more you will be able to save. Also, this money will compound and form something substantial by the time you reach retirement age.
2. Take Matters into Your Own Hand
In a typical marriage, usually the husband ends up being responsible for the finances while the wife handles the domestic front. However, it is time to break these traditional roles and women should take charge of their retirement funds and savings. They should speak honestly and openly with their spouses and find out everything about their individual retirement saving. Also make it a point to find out more about your Social Security benefits.
It has been observed when each individual is responsible for his or her own retirement savings, the collective amount often is more compared to the amount that a couple saves with one person handling the finances.
3. Knowledge is Power
Do not let money intimidate. If you do not understand about retirement savings, educate yourself and learn more about it. This knowledge will equip you with all the information you need to make informed decisions. For instance, if you have an employer sponsored retirement plan, find out the pros and cons. Also, read the document carefully to understand its benefits.
Many employee sponsored plans offer benefits to the spouse. So, if you are homemaker, you should read documents carefully before signing at the behest of your spouse.
Take time to read and find out more about IRA, mutual funds, ROTH IRA and annuities. This will help you understand how you can diversify your retirement portfolio and ensure maximum returns.
4. Estimate Your Retirement Needs
Even if you are not ready for retirement, you still need to sit down and work out the money you will need when you are no longer working. If necessary, take help from a qualified financial adviser who has experience in retirement funds and plans. Be sure to estimate more than you would need, as having more is always better than having less. This will allow you to change the way you save to maximize your returns and build a comfortable nest egg.
5. Do Not Get Tempted to Touch Your Retirement Savings
It can be tempting to delve into your retirement savings to fund your children’s college education or go on a vacation to an exotic place. However, you must restraint yourself because not only you will face a penalty for early withdrawal, you will also have to pay tax on the amount you withdraw. Above all, your retirement savings will shrink and you will find it tough to make up this amount.
6. Keep Increasing Your Savings
Remember, the more you save, the more money you will have after retirement. Hence, invest in different investment vehicles and try to maximize your savings. Besides retirement funds and plans, use your money to invest in bonds, stocks and also savings accounts. This way, you will increase your saving capacity and see your money grow without risking everything in a single investment vehicle.
Summing up: It is necessary for women to plan their retirement finances prudently and carefully. Take control of your retirement savings today and learn about the different ways of savings to ensure you have sufficient money when you retire. This will allow you to have a stress-free working as well as retirement life.