Retirement Planning for WomenPosted on September 16th, 2010 William No comments
Why should retirement planning be any different for women than for men? For the most part, it isn't; however, because women generally make less and live longer than men, they need to save a higher percentage of their income in order to be sure of having sufficient funds available for retirement. Additionally, they're more likely to work in part-time positions that don't offer access to retirement plans.
An additional issue is that women often invest more conservatively when they're young, when they should be investing aggressively to build the nest egg they'll need in later years. Additionally, many employer-sponsored plans require that you work for a certain number of years to become fully vested; leaving the workforce at the wrong time to take care of children can thus wreak havoc on your financial plans.
Some of the problem can be alleviated simply by choosing a job that provides a good retirement plan, and spending more time working, particularly when you're making a high salary; working longer before retirement is generally a good idea, as you put off when you'll need to start withdrawing from your retirement account, allow the money in it to grow longer, and contribute more when you're at (presumably) your highest salary.
If you're married, you should be aware of how much of your husband's benefits you'll be entitled to, should you outlive him. You can calculate the social security benefits you'll be entitled to based on both your and your husband's contributions at the official Social Security website.
Additionally, if you're not currently working and your husband is, you may be eligible to make a spousal IRA contribution; this allows you to contribute to your husband's traditional or Roth IRA, increasing the amount you can invest in the retirement shelter. To qualify for this, you must be married (obviously!), file a joint federal income tax return, and have taxable compensation at least equal to the amount you wish to contribute.