Retirement Readiness Checklist for Women

While women in Iowa are making leaps and bounds in their financial planning as a whole, the disconnect between worries over their ability to retire and their level of preparation are still a major concern for many.

When it comes to preparing for retirement, financial security doesn’t just happen, it has to be planned. Only 40% of Americans have calculated how much they need to save for retirement. Statistically speaking, women are at a disadvantage when it comes to retirement preparedness. 

Many women face unique saving challenges, such as pay gaps, longer lifespans and high health-care costs. And the pandemic has only made matters worse. Nearly three-fourths, or 72%, of women with investable assets of $100,000 or more said the crisis has negatively impacted their ability to retire, according to a January survey by Nationwide Retirement Institute.

A great way to start figuring out if you’re on the right track to retirement, is to ask yourself these questions:

  • How much annual income will I need in retirement?
  • How long might I live in retirement? (Taking in health considerations, genetics history etc.)
  • Have I considered the cost of Medicare premiums?
  • Have I created an insurance strategy?
  • How will I handle my savings once I retire?
  • What taxes will affect my retirement income?

The sooner you prioritize retirement planning, the better. Once you have asked yourself (and answered) these questions, it’s time to make a plan. Here are some readiness steps women can take to jumpstart their savings for retirement!

Abolish Debt Before Retirement

Once you retire, you will be living on a fixed income. Even with a financial plan, there can be surprises down the road that come in the form of unexpected additional expenses. For most women, being debt free when you enter retirement will be an excellent beginning and will make your journey much easier. Remember, saving matters! A great way to start is by saving and sticking to your goals.

  • Pay off Credit Card Debt— pay off as much high interest debt as possible before you stop working—and then keep from accruing any new credit card debt.
  • Pay off Student loans—Staying on top of student loan repayments is important for many people looking to retire. Calculating how much you can afford to send to your lender above the minimum payment can help you speed up the process.
  • Pay off your Mortgage—If you want to stay in your current home, start by refinancing your mortgage to have a shorter loan term. You can always downsize as well by sleeping your house and using the excess to pay for a less expensive home in full.

Sticking to Your Retirement Plan

Your retirement plan should include an income resource, which helps allow for you to draw a consistent monthly income that will serve as an added supplement to your Social Security benefit. Together, they could help provide the money necessary to cover your basic monthly expenses. This will be most helpful during times of extreme market volatility when you may be leery to withdraw any money from your assets that are designed for continued growth.

  • Enrolling in tax-advantaged plans such as 401(k), and Roth 401(k) are great ways to save for retirement.
  • 403(b) plans are also an effective and popular way to save for retirement, and you can schedule the money to be automatically deducted from your paycheck, helping you to save more effectively.
  • Enroll in an IRA plan—There are many kinds of IRAs, whether its traditional IRA, Roth IRA or spousal IRA. It’s a valuable retirement plan created by the U.S. government to help workers save for retirement.

Creating an Emergency Fund

The purpose of an emergency fund is to have cash available to help weather any sudden financial emergency that was not planned for. Emergency funds are not an ATM account for your relatives and friends. This account is for you and only you, for emergencies. 

  • Start by setting small savings goals and then making regular contributions.
  • Automate your savings, have a set amount deducted from your income to be saved during each pay period.
  • Be realistic with your saving goals, don’t over-save and devote too much of your savings to your emergency fund. 

Summary

Retirement planning has many moving parts, is ongoing and can get complicated. For these reasons it is recommended that you find a local financial advisor, someone to help educate you on the nuances of retirement planning. For most women, collaboration with a trusted professional could be a valuable asset in guiding you through the retirement planning process and they will help to keep you on track for many years to come.

No matter where you are on your retirement journey, you have likely made some mistakes along the way. Based in Humboldt and Clear Lake, Iowa, Johnson Wealth and Income Management offers a wealth of services custom-designed to help you get the most from your retirement. Our commitment is to help you work towards achieving all your financial goals and to help provide you with a “worry free” retirement. Contact us here today to set up a consultation.

 


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