Saturday, December 12, 2020

Do you have a retirement plan?

The facts are clear, women tend to live longer than men, and tend to have less money to live on in their later years. There are many reasons, including the impact of the gender wage gap on retirement savings.

According to recent research from the Transamerica Center for Retirement Studies, just 19% of women have a written retirement plan compared with 34% of men. This may not seem like a big deal, but since not knowing where to start is a leading obstacle to retirement savings, the process of making a written plan can make a world of difference in retirement readiness.

The first step in making a written retirement plan is to identify when you'll leave the workforce. This tells you what your government benefits will be, what your deadline is for building your nest egg, and how long your money will need to support you.

When considering your retirement age, err on the side of retiring earlier rather than later. While many people plan to work well into retirement, few do. The easiest way to do this is to plan to retire at the age where you can claim your government's retirement benefit, you'll be in good shape to leave work then if you must. If it turns out you can work longer, you'll simply end up with some extra money.

Next, you'll need to figure out how much money you'll need as a retiree. There are several approaches to doing this calculation, but one of the easiest is to figure out your final salary and assume you'll need 10 times that amount. If you're 20 years away from retirement, assume a 1% raise each year from now until you leave the workforce to calculate your final salary, and then multiply that amount by 10.

Once you've got an idea of how large your nest egg needs to be, it's time to break that big number down so you'll know what to save each month to achieve it. There are lots of online calculators that can help you do that.

Setting a monthly goal makes it possible to work retirement savings into your budget and, ideally, to automate your investments so money is transferred right away to your investment account.

Investing your money can help you hit your retirement target because your invested funds will work for you. But you want to minimize the risk associated with investing -- and developing a comprehensive strategy is the best way to do that. The best way to do this is to see a Registered independent Financial Planner

Finally, keep track of your progress and make sure you're following your written plan and are on track to achieving your goal.

By taking these steps, you can make sure you're well-prepared for retirement. And it's not just women who should take them -- although of course women owe it to themselves to be just as likely to make a written plan as men. The reality is, no matter your gender, a written retirement plan is necessary to prepare for your future

2 comments:

  1. It is a fact that women usually outlive their spouse. In planning for retirement it makes sense to also find and write down the location of all important documents, files and personal contacts.When there is an interruption in managing our lives the woman will need that information. Check out My Life Directory ....it is easy and confidential. Eileen

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  2. The wife usually survives her husband. In addition to retirement planning, take time to find and write down the location of all important documents, records and personal/business contacts. When there is an interruption in managing life, she and family will know where everything is. One way is to use My Life Directory, easy and confidential.

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