If you think that saving for retirement is the same for women as it is for men………..consider this article from The Motley Fool “investing house”, that clearly explains the difference and that women in particular truly need to devote time and attention to saving, investing and crafting a plan for retirement!https://www.fool.com/retirement/2019/03/13/closing-the-retirement-gender-gap-3-steps-all-wome.aspx
The rate of savings needed to fund retirement income is primarily dependent upon when you start. Needless to say, the sooner the better. Savings should be a percentage of your income above and beyond your “cash on hand”, that is set aside with each paycheck and invested. Expected rates of return, anticipated future earnings and social security all add to finding out how much will be needed for retirement and how much you specifically should be saving with each month.
I found this article from CNBC to provide an interesting breakdown of how to start calculating needed savings:
Regardless of age or whether it’s the first or fourth trip down the aisle, keeping money and debt separate might be a more prudent choice for the long term. The article below lays out the pros and cons to a financial relationships between spouses:
Increasing your financial literacy as a woman is an investment of its own. This article from Forbes does a very good job at explaining why continually increasing your financial literacy, especially for women, is crucial and starting sooner rather than later has its own compounding effects.
Today’s financial information and investing models are not gender neutral and can unintentionally provide a discriminating view. Understanding that women naturally earn less, take time off from a career and live longer creates a completely and more expensive path into retirement. This article shares some key pieces of information about why women are encouraged to educate and invest sooner rather than later:
https://www.marieclaire.com/career-advice/a26076501/what-is-investing-for-women/
The taxation of Social Security Benefits is often a shock to most people as it is commonly assumed that after age 70, those benefits are not taxed. The taxation of benefits is based on your income which also includes investment income and non-taxable bond interest irrespective of age.
If you have a combined income greater than $34,000 annually ($25,000 for single filers), then a portion of your benefits will be taxed regardless of age. Also note that RMD’s (required minimum distributions) are considered income and will add to your base for calculating how much of your benefits are taxed.
This is a great article from AARP that explains the details and caveats for the taxation of your retirement benefits. If you have further questions or if can assist you with better understanding your unique situation, please contact my office on 703-535-5921 or send an email to [email protected].
https://www.aarp.org/retirement/social-security/questions-answers/how-is-ss-taxed.html
IF YOU ARE A WOMAN, THIS QUESTION BECOMES FAR MORE CRITICAL AS YOU PLAN AHEAD FOR RETIREMENT INCOME- WHETHER SINGLE OR MARRIED
When social security was created in the 1930’s, the primary roles of women were drastically different than today and when calculating the number of extended years in retirement and years spent in retirement as a single woman, the application of those benefits has changed dramatically.
If you are a woman who will be counting on social security to be your primary source of income during retirement, I would strongly encourage you to sit down with a financial planner, preferably someone with a CFP designation. This article posted by Lorie Konish with CNBC.com explains many things that should be considered when factoring in Social Security Benefits as a part of your plan for retirement income:
As the new year has started rolling forward at what seems like break-neck speed, those end of 2018 tax reporting forms will start to arrive in the next couple of weeks. April 15th will be here before we know it and there is one thing that will make that day seem like any other in your calendar: PREPARATION. The tax laws have changed significantly from last year and so if you do use the services of CPA, ask questions. If you happen to file taxes yourself allow yourself time to research items that maybe unfamiliar this year. This is a great article that I found explaining tips for those who will be itemizing this year:
https://www.thebalance.com/tax-quiz-what-is-deductible-when-itemizing-4140440
Next week I will continue with helpful tax tips while you begin preparing a smooth filing day April 15th.
There may be a gender basis by women typically save instead of invest, however, when women invest, their trading patterns are not reactionary but steady regardless of market swings. As a result of this “hold the line” investment strategy that seems to correlate with female investors, overall their returns are slightly better than those of our male counterparts.
This article from The Street explains the difference and shares hard numbers from various studies that women on average in the long run outperform:
I have seen a growing trend where company pension plans are offering clients the choice to take a lump sum as a transfer into an IRA account. Pensions are expensive to manage and administer as well as ensuring the guarantees, so companies have started to unload them on their employees. Some companies, in fact are not even giving their employees a choice; they are simply telling them that the plan is closing out, how do you want your money in the next 60 days?
Generally, if a client is under the age of 55, this can be a positive benefit as most pension income payments will not keep up with inflation. The ability to invest in an IRA or to buy your own annuity with guarantees and better pricing can offer a hedge for future inflation and its effects on fixed income payments in retirement.
This article published in Forbes illustrates the impacts of inflation during retirement and how forced to make a choice with your employers pension plan could prove fortuitous to invest on your own: https://www.forbes.com/sites/robertlaura/2018/04/30/how-inflation-can-ruin-your-retirement/#5b0a9b6d4bde