Your retirement vision may include thoughts of spending time with friends and family, traveling or volunteering. But have you thought about what your health will look like while you enjoy that time?
It may seem a long way off, but retirement needs your attention — now. Here are some tips and action steps from Transamerica to help you plan.
Healthy living pays off
Women live an average five years longer than men. You’ll want those years to be vibrant ones, not filled with medical setbacks and expenses that could drain your savings.
Taking care of your health basics helps set the stage for good health in older age. Eat smart, stay physically active and check your key numbers such as cholesterol and blood pressure as a young adult and in middle age.
A healthy lifestyle can safeguard your future both physically and financially:
Heart disease is the leading killer of women. And cardiovascular health is tied to brain health. If you have heart disease in middle age you’re more likely to have dementia later in life.
- With a longer life expectancy, woman may need to work longer to have enough in savings for retirement. Being physically and mentally capable of performing job roles will help sustain earning power.
Plan for retirement
According to a 2018 report by the nonprofit Transamerica Center for Retirement Studies®, more than half of women plan to continue working in retirement, and 47% say the reason is because they haven’t saved enough to retire. This could mean a lot of women may not be able to realize their dreams of filling their retirement years with fun and family but will spend their time on the clock instead.
Don’t want that to be you? Take these action steps to make sure your retirement plan is on track:
Calculate when you want to retire and how many years you’ll need to support yourself. Don’t forget Medicare premiums, taxes and inflation.
To get a handle on your Social Security benefits, go to www.ssa.gov to see how much money to expect monthly. If any of your jobs have had a pension, a 401(k) or other retirement plan, track those benefits too.
- Work on a backup plan in case you need to retire early. Could you downsize to a smaller home, take an early pension or move to a less expensive city?
Making up for financial inequality
Women working full time earn 80.7 cents on average for every dollar men earn.
Besides the obvious roadblock of discrimination, financial inequality may come from a job that underpays, career breaks, or scaling back to part-time work to care for children, aging parents or other loved ones. Taking part-time work also means less opportunities for employer-sponsored 401(k)s that come with a full-time job.
Here are some steps you can take to try to close those income gaps:
Make sure you’re being paid enough. Websites like Payscale, Glassdoor and Salary.com can help you figure out if you’re paid comparably to others in similar roles. The American Association of University Women Work Smart offers an online class on negotiating a raise.
Invest more aggressively. The U.S. stock market (S&P) has a historical average annual return of 10%, even with ups and downs. You may be able to invest for retirement at work through pre-tax contributions to a 401(k) if you hold a full-time job. Some employers will match what you chip in.
Find a side job that can bring in extra money. Or, explore passive income opportunities through rental real estate or dividend stocks.
- Get rid of debt as fast as you can, and trim unnecessary costs from your monthly budget. Put that extra money into investments or an emergency fund.
Invest with confidence
You may not be stuffing dollar bills under a mattress, but if fear of losing money from investing has you saving in cash accounts that earn little interest, you can miss out on financial growth through opportunities such as stocks, bonds, mutual funds and property.
Find a book, audiobook or podcast on how the stock market works or enroll in a community college class to raise your comfort level. Don’t stray into “emotional investing” by reacting to every market shift. Think long term.
Consider socially responsible investing. Selecting companies that reflect your beliefs and focusing on what’s good for society may get you more engaged.
Apps can help you automatically invest. For example, Acorns invests spare change from your purchases. Betterment manages your investment portfolio with a robo-advisor.
Finally, consider a professional financial advisor. Only one in three women planning for retirement take this step. Just as you go to a doctor for medical advice and to keep your health on track, a financial professional can help you see the big picture as you tend to money matters.
This blog post is excerpted with permission from the Transamerica blog series Women Planning for Longevity, comprised of the articles “How Women Can Conquer Financial Inequality,” “Women and Retirement: Steps for Success” and “How to Boost Your Confidence in Investing Right Now.”