Savings

Money Sense: Women and Retirement – Keeping Your Retirement Savings on Track – Cross Timbers Gazette | Denton County South | mound of flowers

The increasing longevity of women highlights the importance of preparing financially for those extra years. “We tend to put the financial needs of our families first,” says Marci McGregor, senior investment strategist, Chief Investment Office, Merrill and Bank of America Private Bank. “In the process, we can sometimes lose sight of our own financial future, and with our increasing longevity, this can put us at risk of outliving our assets,” she adds.

If you feel like progress toward your retirement savings goals has slowed, the tips below from McGregor and several other Merrill women leaders can help you get back on track.

Q: What strategies can women use to save for retirement, especially if they have taken time out of the workforce to care for their family?

A: First, make saving for your future a top priority. “We found that women are often more focused on short-term financial goals and less focused on retirement,”1 says Stacy Bucchere, Head of Business Enablement and Client Management, Merrill Wealth Solutions. A tip that can help you: “A lot of people save what’s left over after they pay their bills and spend. We recommend you reverse that,” says Nancy Fahmy, head of alternative investments and specialty asset management, Bank of America. “Step aside a bit first. Then pay your bills. Spending any disposable income should come last.

“Use every available retirement savings vehicle,” adds McGregor. These could include Roth IRAs or your employer’s 401(k). “Set up automatic contributions from every paycheck and consider automatically increasing the amount you contribute each year to your retirement accounts,” McGregor adds.

Q: How can female investors balance the need for growth and income in retirement?

A: “Pursuing growth a little more aggressively could help female investors better prepare for retirement,” says Fahmy. “Taking risks is essential to increasing the value of your investments and keep up with inflation.

A financial advisor can help you determine an asset allocation that takes into account your risk tolerance, the time you have until retirement and your cash flow needs, adds Ninon Marapachi, manager relationship manager at ‘assets, Investment Solutions Group, Bank of America.

Q: What should women think about when they start withdrawing their retirement assets?

A: “By the time women reach 85, there are twice as many of them as men who have reached that age,” says McGregor. Women should therefore plan to make their savings last for more years than men, on average. Work with your advisor to determine a withdrawal rate that’s based on factors specific to your situation, she suggests.

Bucchere tells clients to start by taking inventory of all their sources of income. “Add up your essential expenses and compare them to your sources of guaranteed income,” she says. “Then work with your advisor to determine how the assets in your retirement accounts can help you fill in the gaps.”

Keep in mind that as women get older, “we spend more on health care and medical costs have been rising much faster than regular inflation lately – closer to 7% than 2% . You need to factor that into your planning,” says Amanda Lasher-Ross, Retirement Wealth Management Sales Support Manager, Bank of America. You might consider opening a health savings account, she suggests. When used with a high-deductible health insurance plan, “it’s a tax-efficient way to help you save for medical expenses.” And considering long-term care insurance might also be prudent, she suggests.

Q: Are there any solutions that can help create a stream of retirement income?

A: You could look into annuities, suggests Lasher-Ross. Insurance contracts can provide a guaranteed monthly income, “annuities are a useful tool to protect you against the risk of depleting your retirement savings,” she notes. “You invest today and use the income they produce later to fill the gaps you have between your essential expenses and your other sources of guaranteed income.”

Q: What is the best age for women to apply for Social Security?

A: “Learn early about strategies to maximize your Social Security benefits,” says Lasher-Ross. “It’s one of the few sources of guaranteed income.” Although you may be eligible for benefits as early as age 60, depending on your job and marital status, it may be wise to wait several more years or even a decade.

Longevity can work to your advantage, say every female leader. The longer you need to invest, the more time your assets have to potentially grow. Discussing all of the above strategies with your financial advisor can help you better prepare to get the most out of a long and fulfilling retirement.

For more information, contact Merrill Lynch Financial Advisor Jeffery D. Awards and associates office at [email protected] or (817)-410-4940.

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