(BPT) – Men and women are not the same when it comes to retirement planning. Consider this: A husband and a wife of the same age, earning the same salary and looking to retire during the same year need to account for different factors in retirement planning. This is true even if they share a household, hold joint responsibility for their finances and equally contribute to the amount of incoming funds.
Despite a remarkable career trajectory and rapidly changing roles in the workplace, women need to account for longer life spans as well as unique career patterns. Many women are feeling the impact of these differing retirement realties.
“According to a recent Merrill Edge Report, nearly six in 10 women fear not having enough money throughout retirement, and their amounts are notably higher than their male counterparts,” says Sharon Miller, head of National Sales for Preferred Banking and Merrill Edge at Bank of America. “It’s important that both women and men recognize the retirement landscape is changing, and proactively address the factors and situations that are personally unique to them to help ensure a financially secure retirement.”
So what can women do to better prepare? How can they plan to address these factors and live comfortably in retirement? Here are a few important tips to help you pursue your investment goals:
* Start now to maximize contributions: Save and invest as soon as you can through your employer-sponsored retirement plan, such as a 401(k) or 403(b) account, or set up an automatic transfer from your bank or brokerage account into your personal IRA, Simplified Employee Pension (SEP-IRA) or SIMPLE IRA. Whatever options you choose, aim to increase and diversify your contributions as frequently as possible. But, remember that diversification does not ensure a profit or protect against loss in declining markets.
* Take advantage of unexpected money: If you receive a significant influx in funds, such as a lump-sum bonus, insurance payout, tax refund, divorce settlement or inheritance, avoid the lure of spending frivolously and think about the long-term. If you are willing to assume the risk, consider investing some, or even all of the funds.
* Try not to sacrifice growth for safety: Guard against being too passive in your approach to retirement investing. Be strategic by increasing your level of involvement and make investment decisions based on your retirement liquidity needs and risk tolerance, which is essential to building a robust portfolio.
* Take care of your health now: Practicing preventive healthcare can make an impact on your bottom line by lowering healthcare costs and allowing you to contribute more to your long-term future. It can also help cut costs during retirement and will hopefully lead to a longer and healthier life, too.
* Consider waiting to collect Social Security: While everyone’s situation is different, if you can delay retirement, you may be able to reap significant rewards. By working longer or using income from other sources first, your Social Security benefit grows 8 percent each year until you reach age 70 in the current market.
The bottom line is that while both men and women should invest as much as they can, as early as they can, women face some different realities when it comes to planning for retirement. For additional resources on how to better prepare for the changing retirement landscape, visit www.merrilledge.com/retirement.