Financial Planning Tips for Women

The American Savings Education Council (ASEC) recently held a program about special considerations that women face in achieving financial security in later life. A key point was that the decisions women make early in their lives greatly affect their standard of living later. One speaker advised “Make a positive difference in your financial life because you will be the one that is stuck with it.” Below are six tips shared by several of the ASEC program speakers:

  • Figure Out How Much Retirement Will Cost– Use a simple planning tool such as the ASEC Ballpark Estimate calculator to figure out how much money you will need and how much you need to save annually to reach this goal. The Ballpark Estimate is available as both a downloadable worksheet and an online calculator.
  • Examine Social Security Options– Review your projected Social Security benefit by setting up an online account at https://www.ssa.gov/myaccount/. Carefully review benefit amounts available at ages 62, full retirement age, and 70 and weigh this data against personal factors (e.g., health status and financial need).
  • Avoid Giving Too Much Money to Adult Children– Set a cap on interfamily transfers to avoid diverting potential retirement savings for the living expenses of adult children (e.g., loan payments and cell phone bills).
  • Avoid Quitting a Job for Care-Giving– Keep income and grow future retirement savings by staying on the job. To balance work and family, explore options such as flexible work hours, telework, and adult day care.
  • Save Early and Often– Establish an emergency savings account. At the same time, start funding an employer-sponsored retirement plan and/or an individual retirement account (IRA). Both savings goals (an emergency fund and retirement savings) are very important, Try to multi-task them to maximize compound interest.
  • Learn the Rules– Study the rules of the systems that you plan to rely on for income in later life (e.g., Social Security, Medicare, a pension, and tax-deferred employer savings plan).
     

For additional information about women and personal finance, download the free Cooperative Extension workbookMoneytalk: A Financial Guide for Women.

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