Planning for retirement

Longer life expectancies and employers’ shift away from defined-benefit pensions has brought into focus the need for personal retirement planning. Yet many people, particularly women, may not be adequately preparing for the financial challenges that lie ahead. Accumulating the assets necessary to live comfortably beyond one’s working years requires planning. Decisions earlier in life that may seem unrelated to retirement security can have a significant impact later in life. This article focuses on the decisions many women make that affect retirement security and suggests how advisors can help female clients build plans that accommodate current circumstances as well as the long term. 

Planning for the long term is critical to ensuring financial security through retirement. Most importantly, women need to recognize the unique financial challenges they face and take great care when making decisions that can impact retirement security. The following advice is from a report called Women and Retirement Security written by Nevenka Vrdoljak and Anna Rappaport and released in Sept 2018.

STARTING OFF IN THE WORKFORCE

· Saving early is critical.

· Carefully consider investment options.

· When making career and job choices, consider employment benefits.

· If switching jobs, consider the benefits that may be lost or gained.

· Consider saving in an employer-sponsored retirement plan, an individual retirement account (IR), and perhaps after-tax accounts.

RELATIONSHIPS AND FAMILY

· Pay close attention to personal finances and seek to balance short- and long-term goals.

· For couples, each spouse should be actively involved in making financial decisions.

· Married couples need a financial plan that works for them today and for each spouse in the event of separation.

· Safeguard your own needs before deciding to help other family members financially.

· Both spouses need financial protection, including life and disability insurance; both need to consider funding IRs.

HOME OWNERSHIP AND DEBT

· Spend what you can afford—or less—on housing.

· Don’t forego retirement saving in order to spend more on housing.

· void credit card balances or other expensive debt such as payday loans.

· Keep debt to affordable levels.

· Establish a debt repayment plan and stick to it.

CAREGIVING

· Think carefully before assuming caregiving obligations that could make continuing in your job impossible.

· Do the math to understand how your decision may affect your future financial security.

· If you scale back or leave your job, focus on how to preserve your long-term financial security through alternative means.

NEARING AND IN RETIREMENT

· Plan for a long retirement.

· Carefully consider when to retire.

· Carefully time your claim to Social Security; spouses

· should coordinate their decisions.

· Long-term care insurance is particularly important for women.

· Remember that things change during retirement.

· Understand how you are going to receive health Insurance in retirement.