Did you know that 70% of retirees wish they had started saving sooner? This is especially true for women who often face more financial challenges and employment gaps than men on the way to retirement.
Financial independence for women should be a priority. Women should feel empowered to take charge of their financial futures.
How well are you managing your finances and planning for retirement? If you could use a little help, you’re not alone.
Here’s some financially savvy advice for women retiring.
Change the Way You Invest as You Age
You probably don’t do things the same way you did in your 20s anymore. So why should you handle your money the same way?
Consider your investments and whether they reflect your current needs and risk tolerance. Ask yourself whether your investments will provide the income you need for retirement.
These questions are crucial whether you’re single or married. If you’re married, consider whether you could take care of yourself and maintain your lifestyle on your own.
If you haven’t taken the time to review your savings, investments, or retirement portfolio over the years, now is the time to start. Consider enlisting the help of a wealth management professional to help you do so.
They can help you determine whether your investments meet your current needs and align with your long-term financial goals. A financial professional can walk you through a risk assessment and determine which investments fit your needs and lifestyle.
Don’t Settle for a Traditional IRA Only
You may have saved for years or even decades in your employer’s 401k. That’s fantastic! But, just remember that all of those savings are not yours alone.
You will owe income tax on any amount of money you withdraw from your 401k or IRA. These are great investments for your retirement, but you shouldn’t stop there.
Remember that ordinary income is taxed at a greater rate than capital gains income. Taxes on retirement investments are complex.
It’s in your best financial interests to consult a wealth planner and tax expert to help you develop the best strategies for saving for retirement.
Take Advantage of Roth Conversions
When you retire, your income level may drop. Any drop in income is an opportunity to take advantage of a Roth conversion.
You can convert part of your Traditional IRA to a Roth IRA. You will pay taxes the year of the conversion, but once the money is in the Roth IRA, it will grow tax-free.
All withdrawals will be tax-free as well if you meet IRS guidelines for withdrawal. One of the best times to do a Roth conversion is after you retire but before you take social security.
This is a great time because you’ll be in a lower marginal tax bracket. Speak to a financial expert about the benefits of Roth conversions.
Consider Your Social Security Strategy
Although you’re eligible to receive social security when you’re 62, it’s not the best choice for everyone. The longer you wait to begin receiving social security, the more money you will receive.
If you take social security before your full retirement age (FRA), you will see a 25% reduction in your benefits. If you wait until you’re 70 years old, your benefit increases to 132% of the FRA benefit.
There are additional options for married couples to help maximize combined benefits. To find out the best social security strategy for you, talk to a financial expert.
With the right guidance, you can be sure you’re making smart choices to maximize your benefits to fit your financial needs.
Plan for Life Changes
When you’re young, you may have a plan for the way you want your life to be. As you get older, you learn that life seldom goes as planned, and it’s important to prepare for those uncertainties.
When life throws a curveball, such as losing a spouse or facing divorce, you want to be in control of your current and future financial situation. It’s important to have a “what if” plan which can be a comfort during difficult phases of life.
It’s not just about how much money you make. It’s about having the knowledge and ability to make smart financial decisions as a woman.
Plan for happy days but keep a realistic outlook regarding your investments and financial viability.
Advice for Women Retiring
Women often put the needs of everyone else above themselves. But when it comes to your financial future, it’s okay to look out for yourself.
Know your options and take control of your financial destiny. The goal is to save as much as you can while enjoying the journey.
Retirement can be a long process for women. Women live longer than men generally, so you want to prepare for a sound financial future for many years to come.
Talk to a financial professional about financial advice for women, retirement investments, and diversifying your portfolio.
Financially Savvy Women and Retirement
Today’s women are more successful than ever before. As a woman, it’s important to be financially savvy and ensure you’re prepared for a healthy and successful retirement.
Don’t make the mistake so many women do and regret not preparing for your retirement years. Instead, talk with a financial expert to plan for a bright financial future.
At My Guaranteed Income, we offer more than just investment advice. We strive to help women build confidence in their abilities to build a strong and secure financial future.
Contact us today to schedule a free 45-minute Clarity Money Strategy session.