Though great strides have been made towards creating a more fair and equal economic landscape, many women still struggle to overcome lingering financial and career disparities. Historically, women have usually taken a back seat when making both short and long-term investment decisions, especially when it comes to retirement planning. Thankfully, women are becoming more financially independent, earning more than ever before, and improving their financial literacy. Therefore, now is an opportune time for women of all ages and career backgrounds to proactively seek out policies that ensure a brighter financial future. To help our female colleagues get started, we’ve identified 4 steps that you can take today to develop smart retirement planning habits.
1. Identify Your Long-Term Goals
Motivation is everything when it comes to reaching an objective. To maximize the potential of your retirement plan, you’ll need both a clear vision and a clear goal. If you have defined exactly what you are looking for in your retirement, then it will be easier and more rewarding to keep up the effort day after day.
A great place to start with building your dream retirement is to create a thorough, thoughtful retirement timeline. The timeline you create will help you bring to the forefront your short and long-term tasks. Considering how much the last few years have changed our outlook on many financial matters, strictly defining your plans to see if you are on track with where you want to be will clear any ambiguities that may still be lingering. Furthermore, women must consider the longevity of their plans since they tend to live longer than their spouses. You’ll need to plan your budget around it to make sure the nest egg lasts as long as possible. Ultimately, this strategy will help you develop responsible saving habits and stay realistic with the demands of retirement.
2. Stay Educated
One of the most important steps when it comes to properly preparing for retirement is staying informed on topics related to your social security, individual retirement accounts (IRA), and other accounts like a 401(k). There are so many tools designed to assist you in your retirement, but the only way to make the most out of them is to understand them.
Developing good savings habits as soon as possible will help you in every step of the process on the road to retirement. But there are plenty of other money management habits to research and implement before you reach the recommended social security collection age range of 65 – 70. As a whole, you should look into developing proper financial literacy that is consistently up-to-date with all of the current laws and regulations. When you understand how financial policies function and the reasoning behind those functionalities, you’ll be able to develop a strategy to best manage your money in a way that is the most beneficial to your retirement plan.
3. Automate Your Investments
Automation is a modern development that has done wonders for the world of finance. It is an important step to achieving efficiency on any task and is a principle that can be applied to your retirement plans. Taking the time out of your routine every month to deposit money across various accounts is tedious, time-consuming, and prone to human error on numbers or spending. Additionally, there will always be the temptation to skip one month or spend the money elsewhere if you are relying on the manual process. We highly recommend logging into your accounts on your computer, or even from your smartphone, to automate your 401(k), Roth IRA, and other savings account payments to save time, ensure your planned investments are ending up where they belong, and build your future financial independence.
4. Plan For Long-Term Care
An often neglected cost in retirement planning that is vital to your retirement plan and health in old age is that of long-term care. Though it may not be the most exciting to already be considering end-of-life options, your future self will thank you dearly for ensuring that you have the funds to afford high-quality long-term care. Women have a longer life expectancy than men, meaning there is a possibility that full financial responsibility will fall on them when they outlive their spouses.
Generally speaking, the national median for in-home maker services is $4,481, and this information is a good starting point to plan your budget. In light of increasing your financial literacy, it is also a good idea to consult an insurance agency that has experience planning efficient retirement and can take into consideration even more angles. If you make sure to account for these potential costs and add them to your plans, you will be setting yourself up to avoid future financial stress when the time comes to find that extra help.
Between the longer life expectancy and a narrowing wage gap, proper retirement planning for women can be a complex topic if not approached proactively and as soon as possible. It takes an entire lifetime to build your dream retirement and understanding the proper roles of social security and aggressive saving will improve your quality of life now and once you retire. If you still have questions on how to start planning your financial future, we are happy to answer them. Contact us today for more information.