Mothers often wonder what the future holds for their children, but they should not forget to plan for themselves, especially when it comes to finances and retirement.
Retirement Week Tip: On Mother’s Day, do some retirement planning, keeping in mind how much you’ve already saved, how much more you’ll need to invest based on your goals, and what you want out of retirement. If you are not a mother yourself, consider giving this idea to someone close to you.
Women and men do not always approach retirement savings in the same way. They may invest differently because women are more conservative than their male counterparts, or they may not be able to save as much for their future because of lower incomes, as evidenced by the gender pay gap. Women also tend to have a longer life expectancy, which means that their savings have to be extended over time, and they are also more likely to act as caregivers for their children and loved ones who are ill. Time out of the workforce could be detrimental to your nest eggs and your future Social Security benefits.
These factors have pushed more women to face poverty in old age than men, according to the Center for Retirement Research.
I’ll see: Do men and women save differently for retirement?
Some of these circumstances may be unavoidable, at least in the short term, but planning can still help.
When it comes to care, women should talk about the logistics of this service with their relatives, such as the partner in the case of raising a child, or siblings, aunts or uncles when it comes to care. ‘a great parent. Many caregivers said that even without paying, they would do their job again to help their loved ones, but drawing up a care structure could benefit people who act as caregivers as well as those who receive care. attention. There may also be benefits available for family caregivers, such as receiving payment for their time.
This logistics should include the actual hours that will be spent (and how this could affect their work schedules), the expectations of care (such as physical and financial responsibilities) as well as how to pay for this care without the responsibility falling entirely on them. a person. If possible, people should talk to relatives who need – or will need – attention exactly what they expect when the time comes. The earlier you have these conversations, the easier it will be when you need help.
When it comes to child care, if a parent leaves the workforce, they should both discuss a savings plan that benefits both people in old age. When a person leaves the workforce, they can no longer benefit from a retirement account sponsored by the employer. However, spouses can contribute to an IRA on behalf of a non-working spouse. Later, married couples should also talk about how they will claim Social Security benefits. This includes whether they will reap the benefits sooner rather than later, and what the consequences would be for the spouse with the lowest historical income, as well as how they can coordinate their claim to maximize their benefits in a way that aligns with their current . cash flow needs.
See also: The women’s retirement crisis is even worse than you think
Aside from talking about retirement plans, women should arm themselves with as much financial advice and education as they can. This could come in the form of working with a financial advisor, or being active in conversations with the family’s financial advisor if they already have one. For those who are not interested in working with a financial professional, there are plenty of books and resources online to calculate the likelihood that your savings will last you the rest of your life, as well as rebalancing or managing a portfolio of investment, budgeting and when to claim Social Security benefits.
MarketWatch teamed up with NewRetirement to create retirement savings calculators to help readers make sense of their finances.
Women should also think carefully about their own care needs, discuss these ideas with family members, save more for the medical costs they may incur in their old age, and weigh the options for insurance and health care products. long-term care that could benefit them.