5 Retirement Tips for Women
Thanks to a number of handicaps, including lower-paying jobs, the gender wage gap and prolonged absences from the workplace for caregiving or raising children, women don’t save enough for retirement, but have a hard time doing so even when that’s their goal.
But that doesn’t mean that there aren’t steps they can take to better their situation. A Marketwatch report suggested numerous ways that women can better prepare for retirement. Exude has chosen 5 favorites:
5. Pay down your debt.
Make it your goal to enter retirement debt free. If not, interest payments will nibble (or even chomp) away at your retirement funds until you run out of money.
You have no way of knowing what sort of situations and expenses you may face in retirement. Making sure that your debts are paid off before you leave the workplace lessens the likelihood that unexpected expenses will take down your dreams of a fulfilling retirement—whether that’s your chance to volunteer, go back to school just for fun, or spend time with family and friends.
4. Find help to plan for retirement.
There are many considerations in planning for retirement, and lots of things to consider regarding saving, investing and the myriad other actions that go into a successful retirement.
You might want to consider consulting a financial planner—in particular, one who offers a fiduciary relationship and looks out for your best interest and no one else’s—to help you get all your ducks in a row. That way you’re less likely to overlook some essential part of the planning process.
3. Stall on drawing Social Security.
Ignorance of how Social Security works can cost you—for the rest of your life. If you claim benefits too soon, you’ll consign yourself to a smaller check that could really cramp your style in years to come. Since many women rely on Social Security to provide anywhere from 25–60 percent of their monthly retirement income, this is a big deal. If you can wait till age 70 before you start drawing checks, you’ll get a substantially higher benefit than you would if you sign up for benefits as soon as you’re eligible.
Claiming at age 62 will result in a 25 percent reduction on what the full benefit amount would be if you waited till your full retirement age (65, 66 or 67, depending on your year of birth), while waiting till age 70 will increase benefits for boomers by 32 percent over what they would get at their full retirement age—an increase worth waiting for.
2. Look for additional monthly income.
Figure out a way to create another consistent income stream during retirement that can boost the income from Social Security. Ideally, you should seek enough of an income stream that together with Social Security can meet all your monthly expenses.
A reliable alternate source of income that can supplement Social Security can help you weather periods of extreme market volatility when you might not want to draw on assets that otherwise would continue to grow and provide future income.
1. Downsize—in advance.
If you already know you’ll be moving to a smaller, easier-to-care-for residence when you retire, you might want to do it ahead of time, and get both the fuss and the expense out of the way.
Not only will you probably save money in that smaller home, but you’ll be all settled in by the time you retire and already familiar with the area and support system you’ll be living with.