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Lauren's Updates

The following content originally appeared in an article by Brian O'Connell on the popular financial site TheStreet.com on July 14, 2016.


5 Key Must-Dos For Women Looking for a Successful Retirement

American women, it's becoming increasingly apparent, have a tougher job saving for their post-working years than men do... Job one for women looking down the road toward retirement is to know their financial situation, and also know they have a relatively bigger challenge than men in saving for a decent retirement...

To lay out an action plan that will get women retirement savers out of the block, and to get on the right track, TheStreet asked financial industry experts for specific tips on upgrading their money management game. Here are five of the best tips in the bunch:

1. Focus on deferring taxes - Your money will grow faster without the drag of taxes every year, says Emily Brandon, senior editor at U.S. News & World Reportand author of the new book Pensionless: The 10-Step Solution for a Stress-Free Retirement. Defer taxes on your retirement savings by contributing to a 401(k) or IRA, Brandon advises. "If you contribute $5,000 to a traditional 401(k) plan and you're in the 25% tax bracket you'll reduce your income tax bill by $1,250," she says. "Income tax won't be due on this money until it is withdrawn from the account."

2. Get a good financial advisor and ask the right questions -Make sure you know the questions you should be asking your advisor to optimize your retirement, says Michelle Brownstein, a financial planner at San Francisco-based Personal Capital "How much money do I need to save each year to retire at my desired retirement age?" Brownstein says. "What assumptions are you making in terms of returns in that calculation? What are my total fees for the strategy you've built for me, including advisory fees, trade commissions and product costs?" All of the above are questions women need to ask their financial advisors when hammering out a good retirement savings plan, Brownstein says. 

3. Stand on your own two feet, financially - This one is a tough, but ultimately game-changing move for women looking for financial security in their 60s, 70s, 80s and beyond. "Be financially self-sufficient in your marriage or any relationship," advises Lauren Klein, a certified financial planner who specializes in helping women manage financial transitions and gain financial confidence. "I can't tell you how many women I've worked with who trusted their partners to do right by them and were bitterly disappointed. Take equal responsibility for your financial health. Remember: building your financial future isn't anyone else's job. It's yours."

4. Get rid of debt - If your bottom-line goal is to create wealth, make erasing debt your top priority, Klein adds. "Debt is a drag on wealth that compounds negatively, stripping away your ability to out-save men in the race to retirement," she says. Household debt should be a big priority, especially if a women is coming out of a failed marriage. "If you're getting divorced, keep assets that generate long-term wealth," Klein states. "While you may feel emotionally attached to your home, a house is not an investment asset. Focus on retirement funds and other savings vehicles that can produce income in 20 years."

5. Cover future medical expenses with an HSA - While 401(k) plans tend to get all the attention when planning for retirement, health savings accounts are an often-overlooked tool that can help women save for medical costs, of the biggest retirement expenses. "The HealthView Services: 2016 Retirement Health Care Costs Data Report estimates that the total cost of healthcare for a 65-year-old couple retiring today to be $377,412 (dental, hearing, vision and all other out-of-pocket expenses included), and $567,903 in the future, notes Jody Dietel, chief compliance officer at WageWorks, in San Diego. "An HSA, designed to be paired with an HSA-qualified high-deductible health plan, allows you to set aside money pre-tax via payroll deductions to cover out-of-pocket health expenses," Dietel says. "Establishing an HSA gives you the ability to amass savings to be used exclusively for medical-related costs in retirement, preventing the need to dip into 401(k) funds."

For women looking to get the upper-hand on saving for retirement, covering the five key areas above will give them a huge head start, and also provide a much-needed turbo-boost to a critical personal financial area that, unfortunately, hasn't always been a big priority for the female gender in recent years. 

Click here to read the full article on TheStreet.com.

 

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All written content on this site is for information purposes only. Opinions expressed herein are solely those of Lauren S. Klein, President, Klein Financial Advisors, Inc. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. Read More >