6 do-it-now retirement moves for women

In our busy lives as working women managing our careers, family, and financial priorities, we tend to put the needs of others before ourselves.

We also face unique challenges that may impact our financial security later in life. We may spend fewer years in the workplace due to raising children or being a caregiver. And, statistically, we live longer than men. Couple that with the fact that divorce rates for women over 50 doubled over the last 20 years, and chances are an increasing number of women will spend more time in retirement flying solo.

While it’s easy to procrastinate about retirement planning, or making our finances a priority, we, as women, can’t afford to wait to put our financial future first.

Here are six ways women can prepare for retirement:

1. Money on the side. Life can get tough. There are rainy days and then there are tsunamis. Start an emergency fund that can cover three to six months of expenses so that you can pay off an unexpected expense without having to tap credit cards or raid your retirement savings. Keep the money in an account where it can be easily accessed. Having money on the side also gives you the freedom and flexibility to make changes in your life.
2. Pay yourself first. I know this may sound like a cliché, but paying yourself first is an important step in preparing for retirement. Make sure that each paycheck diverts money into a retirement account as well as accounts for other savings goals. If you have access to a workplace retirement plan, aim to save 15% of your salary, including any employer match. If 15% is challenging, start at 6% and increase your contribution by two percentage points each year. Plans that offer automatic increases can make upping your contribution each year a simple step. If your plan offers this, make sure to sign up. At a minimum, take advantage of any available company match. If you don’t have a workplace retirement plan, consider a Traditional or Roth IRA. If you are self-employed, you can open a SEP IRA. Contribution limits differ depending on the account and, in some cases, your income.
3. Get comfortable with finances. Women tend to be thoughtful and want to be well-informed before making decisions. This may make it challenging to get started. Educate yourself, so you can be comfortable talking about your finances. There are a number of podcasts on finances that you can listen to while commuting, walking the dog, or exercising. Or if you are in a book club, pick a book on finances and discuss it as a group. If you have a financial professional, make sure to actively use that resource and don’t be afraid to ask questions.
4. Crunch the numbers. Retirement calculators are another great resource. There are plenty of free tools online that can help you get a sense of your current retirement savings situation, where you need to be, and what you need to do to achieve your future goals. You may not have to look further than your own employer for resources that can help you become financially fit.
5. Explore a spousal IRA. Being out of the workforce doesn’t mean you can’t save for retirement. You are eligible for a spousal IRA if you are married, file a joint income tax return, and your taxable compensation is less than your spouse’s. The account should be opened in your name and under your Social Security number. For 2017, you can contribute the lesser of $5,500 ($6,500 if age 50 or older) or the total compensation includable in income for both you and your spouse less any contributions made to your spouse’s IRA.
6. Get strategic about Social Security. As women tend to live longer than men, it’s especially important to consider how Social Security benefits fall into your retirement income plan. Discuss how to coordinate claiming benefits with your spouse. Just because you can begin benefits as early as age 62 doesn’t mean you should. The size of the surviving spouse benefit will be an important source of income down the road. If divorced, you may also be eligible to receive benefits based on your ex-spouse’s work record if those benefits might be greater than your own.
   

You don’t have to be wealthy to feel worthy of prioritizing your retirement. Taking an active role in planning for your retirement is about believing in you—and your future financial security.

 _{This article was written by Judith Ward from Forbes and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.}