5 retirement risk every woman should know (and plan)

5 retirement risk every woman should know (and plan)

For the average American woman, the odds are good that at some point her own, she will handle her finances.

This is not only because women live longer than men in about five years, but also because many women these days choose not to remarry after divorce or remain single. According to the latest figures, for women at least 40% of the major economic pillar in American homes. And their economic impact is expected to maintain growth and personal wealth.

However, women still lag behind when it comes to overall financial knowledge. Just one example: In a financial assessment of knowledge, men answering the right questions, 56% – 5 percentage point improvement in the 2017 Women of questions answered correctly, 47%, disappointing one percentage point from 2017, Dr. Yun [ 123]

This is a problem because, as you might expect, the same study found that the problem of respondents answered correctly and the financial health of several indicators, including the close link between the number of savings and retirement plans.

A woman does financial planning now will determine how she will manage later, when she no longer earn a salary. If you’re married, that planning can be a team effort, but you can not sit back and hope your husband figures it all for you. I have seen this as an important source of income is gone, because they are divorced or widowed who in his later years has been destroyed, many women.

Women do not want to just survive; we want to grow. To do this, you must have a plan that covers all risks yo ü problems you might encounter after retirement include:

Income risk

In retirement, you the result is your income. Our challenge is to maximize each of your source of income, so you never need to worry about outliving your money. For a woman who is married, widowed or divorced Social Security claiming strategies for who is not married is completely different from those applicable to people. Since each person’s situation is different, run a social security maximization analysis may be a good start. This analysis will look at all sources of income, your age and marital status, to help you determine what is best for you.

Also choose to determine their pensions may be more complicated, married couples. Only A living expenses may be higher, but this means the pensionHolders of death, the income stops. If you are married, you will rely on this income, you may want to choose a pension expense of living together. And no matter what your marital status, you also need to plan how you will extract income from your retirement account. You have to do some research, but this knowledge will give you.

The risk of asset allocation

As you put all the moves, it becomes a state of mind from the accumulation of protection is very important. Of course, it’s always a good idea to keep track of how your money is invested, but retired a few years ago, this is particularly important. Whether you are or the consultant’s work a DIYer, you should have a plan that fits your risk tolerance (your ability and willingness to cover potential investment losses) and your time span of a few years (before the remaining scheduled retirement) of .

If you have your pre-retirement leave for a few years, you might be willing to take more risks. However, if you plan to retire in the next five to seven years – you will not have time to recover from big losses in the market – you can benefit from the program more focus and help protect your nest egg target diversify your investments .

Implementation of “fighting strategies” to help you over time to balance your needs. It should include:

  •  Security bucket, easy money, and at any time for emergencies
  • Income of fighting, and investment, will provide a stable source of income throughout retirement. .
  • And a growing fight, and investments, such as stocks, that increase the likelihood of inflation to catch up.

With age and closer to retirement, you should consider less risky, but if you have to take care of your emergency fund and income, you can afford a little more aggressive and stock your portfolio.

Longevity risk

According to the Social Security Administration, a woman opened the 65 life expectancy today, on average, until 86.5 years of age. About a third of 65-year-old today will live past 90, about one in seven people will live past 95 women in their retirement accounts often for less money and a smaller Social Security benefits, because many spend time away care of their children, grandchildren or parents. M refers to women based on the contract carefully take decades to retirePlan all financial ups and downs that can occur during this time.

It is working with financial advisers who specialize in retirement planning – and not just invest in growth – can help. The relevant products and strategies (such as life insurance and / or annuity), can help provide retirement pay whatever you long to live priorities, and talk to the revenue stream.

Inflation risks

Anyone who remembers when the price of gasoline is $ 1 a time to know what inflation is yes. But it is another thing to understand the impact of inflation on retirement plans. While you may see your social security benefits and pension costs of living slight bump each year, you may still need to own my nflation protection plan in place, your age to maintain your purchasing power. This may include a certain percentage of funds invested in long-term growth potential of stocks or funds and / or downsizing your costs over time.

Tax risk

This assumes that your taxes will automatically drop to retire, because you will spend less money is wrong. If you plan to maintain the same lifestyle, you may need the same income. And do not forget: you have saved money in the IRA or 401 (k) is not all that you have. You can make any withdrawals from your tax-deferred retirement account to pay ordinary income tax – the cost once you turn 70½, you must take a minimum distribution (RMD to) required you can not escape.

You may have heard the old saying, it’s not how much you earn, but how much you have reservations. If you have not, you might want to check to be taxed in a variety of ways, money in your nest egg – maybe some of your savings, Roth, it is characterized by the retirement tax-free growth and withdrawals.

Medical risks

You might see ads warned that Medicare does not cover all medical expenses. A good supplementary medical insurance can cost some basic help, but medical expenses you may still have to deal with as you age. After that, you still need a plan to cover the possibility of long-term care needs. According to the 2019 Genworth Cost of Care Survey, the national average cost of semi-private room in a nursing home is $ 7513 per month. If you or your spouse ñ EED special care, it may soon run out of youNest egg, so you do not have resources to comfortably carry on. There are products available to help deal with these costs, including traditional long-term care insurance, long term care comes accelerate a long-term care rider or permanent life insurance policy with a death benefit allowed to help pay for the cost associated with hybrid pension qualifying . But you have to do some homework to find the one that best suits your needs and budget.

If you’ve been trying to pick up the money to retire, but you do not know where you stand when it comes to the above-mentioned problems, talk to an independent financial adviser, who specialize in retirement and help you save maximized. If you already have a one dviser, but if you get an answer or access to a product, you need strategy, do not you think, it may be time to leave. Find someone, you can use the words of comfort, trust who can see your best interests trustee.