Drink it all in with personal finances


Kelley Donovan PHOTO CREDIT: Nicki Kohl

Mothers, sisters, daughters and friends: Pour a glass of your favorite beverage, and let’s talk.

It matters that you are living a responsible and smart financial life. It matters as much as eating well, movement, mental stimulation and having those oh-so-necessary friendships.

Here is a truth (take a gulp of that beverage first): Women have a more critical retirement savings challenge versus men. There are two factors at play.

Women have a longer life expectancy than men. That fact underscores the need for greater retirement savings.

One research study projects that a woman will require age 65 savings equivalent to about 12 times her final salary for an adequately-funded retirement.

Do that math right now. Will you hit that?

A man needs about 10 times his final pay.

We lovely female social beings live longer and will have lower Social Security coming in as a singular person.

Don’t feel badly if you are not on track for this 12-times earnings nest egg by age 65. There still is time. You are not alone in this situation, either. More than 70% of women are not.

A woman might spend much of her retirement.

By age 65, about 25% of American women are widowed or otherwise single. Household expenses rarely are halved after a divorce or spouse’s death, so your comfortable financial survival could entirely depend on your attention to retirement planning.

Social Security survivor benefits often prove insufficient. If you (and your spouse) file for Social Security at age 62, the survivor’s benefit for the longer-lived spouse might be close to 30% less than if the claiming decision was held off to full retirement age.

Women should save consistently and as much as possible. Your retirement might be nice and long, and you want your finances to comfortably last with you.

What can you do now?

For a higher level of comfort and stability throughout your older years, do not procrastinate. The earlier you deal with it, the better. Today is better than tomorrow, and tomorrow is far better than next year or worse, next decade.

Women often put others’ needs before their own. Think about the instruction video you watch on an airplane: “Put your oxygen on first, so you can be there for others.”

You can start with $25 per month into an IRA (or retirement plan at work, if available to you). And please, get a good team, with a financial advisor — and maybe a CPA and lawyer — who listen to you and do not talk over your head.

Money coaching is available at your credit union or bank if you have debt to overcome or are just getting started. Your financial advisor should care about your best outcome, with your goals and needs at the forefront.

Go do it. Now, pour yourself another glass and relax. You’ve got this.

Source: “Why Retirement Planning is So Vital for Women.” Created by LPL Financial May 21, 2020.

Kelley Donovan is a managing partner and wealth advisor with LPL Financial/Richmond Investments in Dubuque.

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