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Women Bridging the Retirement Gap

By | 2017, Money Moxie, Newsletter | No Comments

It’s true that women average longer life spans than men. What is often unknown, or in some cases marginalized, is that we will need a larger nest egg to provide income for those additional years. This requires creative planning. Not necessarily more risk; rather a more defined plan for using the money we have saved for retirement.

As women, we also tend to focus on quality of life. We value things that give us purpose and enjoyment: traveling, giving back to our community, or creating memories with our children and grandchildren. These ideals drive our financial goals and decisions while money helps us achieve them.

Women often feel insecure about their financial
decision-making abilities. Building financial confidence is important. We need to be educated and have a better understanding of the decisions that need to be made and the options available to meet our needs. Once we have financial confidence, we are committed to our plans. We have a real desire to stay on track to attain what we consider to be financial success.

Developing financial confidence is the foundation to financial success. This comes naturally from our financial experiences – good and bad. It can also come through an exerted effort and a desire to have more knowledge and a greater understanding. Here are three ways you can take control:

Get Educated: Rather than wait for the life lessons to take shape, make an effort to learn more. You can attend educational seminars in the evening. Caution advised, most seminars offering free meals etc. focus on selling you a product. Our seminars are designed to educate you regarding specific topics and concerns. If you are busy at work, watch an educational webinar while you have lunch or in the evening from home. Our website has a collection of resources focusing on women and their unique needs. You can find it by clicking on Women and Wealth from our home page at SmedleyFinancial.com. If you have additional questions or want information on a specific topic, give us a call. We have a library we can draw from to provide you with the resources you are looking for.

Create a Financial Plan: A financial plan focuses on your personal financial needs, goals, and current circumstances. No matter where you are financially, you need a plan to move forward. Women often start a financial meeting by saying, “I don’t have very much….” The truth is, the less you have, the more important every dollar becomes. A plan will help maximize the assets you have available, creating a clear path to your financial goals and direction that will help you circumvent potential roadblocks.

Design a Retirement Income Plan: Most women want to know, “How will I replace my paycheck when I retire?” A retirement income plan is just as important as, if not more important than, a financial plan. Making sure that our money lasts throughout our retirement years is essential. By the time we retire, few of us will have the luxury of picking up another job to provide additional income. If we overspend in the early years of retirement, we may impede the success of our plan long-term. The same can be said about taking too much or too little risk; the results can be devastating. An income distribution plan must be updated each year to evaluate our ability to maintain our desired lifestyle.

You have the resources and ability to take control of your financial future. I understand you are very busy. Still, I challenge you to take the next step. Find one topic you want to know more about. Visit our website, give us a call for resources, or attend a seminar or webinar to learn more. There is never a better time to begin a financial journey than today!

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Women Should Save 2 Percent More Than Men

By | 2016, Money Moxie, Newsletter | No Comments

In an age where women have an increased influence in the workforce, it doesn’t seem right that women have to save more than men for retirement. However, that is what the research from Hewitt Associates suggests.

There are several contributing factors to this need, some inherent and some that can be corrected. An inherent factor for women is a longer lifespan—living an average of three years longer than men after retirement. The extra 2 percent is needed for the additional insurance cost for a longer life. The lower average yearly salary for women ($57,000) compared to a man’s ($84,000) indicates that a woman should save a higher percentage to match the dollar amount men save. Some correctable factors include: waiting longer to start saving for retirement, investing more conservatively, and not taking advantage of the company match in a 401(k).

Women are able to close the retirement gap by taking a few simple steps.

• Invest early and increase contribution rates. One goal should be to contribute 10-20 percent of gross income into a retirement account. This doesn’t have to be done at once; contributions can be marginally increased each year.

• Ask for advice. Many women feel insecure about managing finances. A wealth management professional can help determine personal risk tolerance and how aggressively to invest money.

• Leave a 401(k) invested. If suspending work due to family reasons, don’t cash out a 401(k)—this avoids taxes and hefty penalties. A 401(k) can be rolled-over into an IRA or professionally managed account.

• Put off retirement for a few years. This may be painful but could mean a great deal down the road. Don’t sacrifice the future for the present.

Women have several challenges that make retirement preparation more difficult. Recognizing these issues and making small changes in their saving and investing habits can have a significant impact.

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