麻豆传媒

Creating an income plan for retirement

As an entrepreneur, Cathryn Lavery has plenty of experience solving problems and making decisions about what to do with money. When it came to retirement planning, however, that felt like a different challenge.

鈥淚 literally just had money sitting in a checking account, trying to figure out what to do because you have all these options,鈥� she says. 鈥淚 just wasn't sure where to put it. It was just decision fatigue and not wanting to make the wrong decision.鈥�

Many people carry some uncertainty about their retirement finances, but women face a special set of challenges. In the United States, women can expect to live nearly six years longer than men¹ and may earn less due to caregiving roles and pay inequity. Because women may earn less over a career, they can also be at a disadvantage when claiming Social Security, which is based on total earnings.

鈥淚 think a lot of times people think of retirement as building up investments, but it's also making sure that your downside is protected if something goes wrong,鈥� Lavery says.

Lavery has a slightly different definition of retirement than most. She doesn鈥檛 plan to stop working, but she does know what she wants in her later years. 鈥淚 see retirement planning as more like, 鈥楬ow do I not have to stress about money in general?鈥欌�� she says. 鈥淭hat鈥檚 kind of what I think of retirement as. Now, I'm always putting more money in my retirement accounts. Just like, let's just keep adding to it.鈥�

She and her wife are working with a financial professional now, too. A third-party look at the whole financial picture is helpful, they鈥檝e found. Because if you鈥檙e going to have a comfortable retirement, you need to dial in the details while you鈥檙e working so you can have the income you need. Here are a few things for women to keep in mind as they consider how to save what they鈥檒l need for a comfortable income in retirement. 

Know where your money will come from

A 401(k) is the most common plan employers offer. Make sure you鈥檙e enrolled and contributing as much as possible. Many employers will match your contributions up to a certain percentage. Find out how long you must be in the plan to be 鈥渧ested,鈥� which means you鈥檝e earned the right to full benefits. Some employers require a certain number of years for matching benefits to truly be yours or for full pension benefits if one is offered. All of that is important to know when trying to understand how much these plans will contribute to your final amount.

For women who may take time away from the workforce to care for an elder relative or have a child but want to keep their retirement savings on track, it might be worth considering options outside an employer鈥檚 plan. There are plenty of options, including IRAs, a mutual fund or annuities. 

An annuity offers the ability to create a guaranteed stream of income and provide the comfort of knowing you won鈥檛 outlive your savings. It can also protect you from market downturns during your retirement.

Each option has its own set of rules, regulations and tax implications that a financial professional can help you understand.

And, of course, there鈥檚 Social Security. If you work, you likely contribute. You can track your eligibility, earnings and calculate your eventual benefits at . 

Advocate for yourself

Understanding your options can help you make the best decisions for you and your family. A key to doing that is financial literacy. It can be daunting, but there鈥檚 plenty of available help, including podcasts, personal finance books and newsletters like 麻豆传媒 Smart Strategies you can subscribe to for free.

Work with a financial professional

A financial professional can help you map a clear path to retirement. Checking in regularly with a financial professional can help you to stay on that path and make any adjustments that may need to be made along the way so that when it comes time to collect on your retirement income, it鈥檒l be ready and waiting. 

Want the most from your retirement? Get smarter with Smart Strategies from 麻豆传媒. Your source for tips, tools and financial solutions that can help you live your best life.

¹

The term 鈥渇inancial professional鈥� is not intended to imply engagement in an advisory business with compensation unrelated to sales. Financial professionals will be paid a commission on the sale of an 麻豆传媒 annuity.