If
you're a woman, you have to be actively
involved in your financial preparations
for retirement, and that's true whether
you're single or married. As a woman,
you have at least two special
considerations associated with your
retirement planning:
-
You've got a longer life expectancy.
Women typically outlive men by about
seven years, according to the U.S.
National Center for Health
Statistics. More years of life mean
more expenses.
-
You may have less money in your
retirement plan. Women drop out of
the work force for an average of 12
years to care for young children or
aging parents, according to the
Older Women's League, a research and
advocacy group. This time away from
the workforce results in women
accumulating much less money in
their employer-sponsored retirement
plans, such as 401(k)s.
The prospect of a long,
underfunded retirement is not a pleasant
one. Fortunately, there's much you can
do to avoid this fate. For starters,
know what's going on in your financial
situation. If you are married, share the
responsibility of making investment
decisions. What are your retirement
goals? Are the two of you investing
enough to eventually achieve these
goals? And where is the money going? You
must know the answers to these
questions.
You'll also need to know
what you could expect to receive if your
husband dies before you. As a surviving
spouse, you will likely inherit all your
husband's assets, unless he has
specifically named other people – such
as grown children from an earlier
marriage – as beneficiaries.
Nonetheless, you can't just assume that
all sources of income that your husband
receives will automatically roll over to
you. For example, if your husband were
to die before you, you wouldn't get his
Social Security payments in addition to
your own, although you could choose to
collect his payments instead of yours.
But if you both earned close to the same
income, you might not get much of an
increase in Social Security benefits.
In any case, whether you're
married or single, here are some moves
that can benefit you:
-
"Max out" on your 401(k). If you can
afford it, invest the maximum amount
into your 401(k) and increase your
contributions every time your salary
goes up. Your 401(k) provides you
with tax-deferred earnings and a
variety of investment options.
-
Contribute to an IRA. Even if you
have a 401(k) or other
employer-sponsored retirement plan,
you might be eligible to contribute
to a traditional or Roth IRA. A
traditional IRA offers the potential
for tax-deferred earnings, while a
Roth IRA potentially grows tax-free,
provided you don't take withdrawals
until you're 59-1/2 and you've had
your account at least five years.
You can fund an IRA with virtually
any investment you choose.
Do whatever it takes to help
ensure a comfortable retirement. The
sooner you start planning, the better.
|
