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Retirement Planning Tips for Women Who Want an Edge

| April 07, 2017
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Actuarial data shows women live longer than men, but many women lag behind in retirement savings. Astute retirement planning gives modern women the edge whether they are single, married, work outside the home or manage a household. According to an article by cnbc.com, women in the United States save less money for retirement compared to their male peers. A recent Global Investor Pulse Survey showed fewer women in the workforce have begun saving for retirement. Sixty-five percent of employed men versus 53 percent of female workers in the United States save for retirement. One of the smartest moves successful female investors make is to rely on a financial services company that helps set up a diversified portfolio with a mix of mutual funds, exchange-traded funds or ETFs, annuities and bonds. The survey revealed women often make the mistake of being too cautious or conservative with investments.

Invest for growth
If you are young, it is especially important to invest for growth. The study showed females maintain a retirement investment portfolio with 68 percent of their retirement savings in ultra-conservative money market funds or certificates of deposit. In contrast, only 59 percent of the male investor’s portfolio was in a cash or cash equivalent type of investment. Without growth stocks, your retirement account will not experience rapid growth. Part of financial planning is to decide your target retirement date as well as the specific mutual funds and ETFs or other investment choices that will allow you to retire with enough money on time.

Consider a spousal IRA
One of the reasons experts say women lag in retirement savings is because they often work part-time or exit the workplace for periods of time to care for children. Instead of failing to contribute to a retirement account when you aren’t earning income, consider opening a spousal Roth IRA. As long as your husband has earned income and you meet income guidelines, you’ll be able to keep the momentum going with your retirement planning.

In a time when authors talk about the benefits of a “wife bonus” for stay-at-home moms or financially dependent housewives, the idea of a spousal Roth IRA offers some financial empowerment.

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