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4 Ways That Women Can Build a Backup Plan for Retirement
It's a shocking statistic: 64% of women have no back-up plan if they're forced to retire early, according to a Transamerica study. This can happen for multiple reasons: a health condition, company layoffs late in your career, a need to care for a family member, and more. An unexpected retirement can create major challenges for women if they aren't prepared.
It's important to have a back-up plan, so here are four strategies to help you avoid finding yourself in this situation:
1) Delay drawing on Social Security benefits
It can be very tempting to collect Social Security benefits early, but waiting until you turn 70 means you'll collect your maximum benefit amount. This strategy can boost your retirement income significantly! If you wait until age 70 to start receiving your Social Security benefits, you could increase your retirement earnings by approximately 32% over the normal retirement age of 66. Delaying your claim from age 62 (which is the earliest age you can claim the benefit) to age 70 can boost the benefit's value by as much as 76%. How big of a difference would that make in your income?
2) Have your working spouse contribute to a Spousal IRA.
Have your working spouse contribute to a spousal IRA during times when you're not working. As long as the working spouse has enough earned income, he or she can contribute up to $5,500 (if 49 or younger) and up to $6,500 if age 50 or older.
3) Find work-from-home positions
Another way to offset an early and unexpected retirement is to look for work-from-home positions to boost your income and balance caregiving responsibilities. Women account for 60% of the caregivers in the United States. In many instances, caregiving demands hours of work a day, usually unpaid, preventing you from being able to work a traditional job. Working from home can allow you to balance caregiving duties with a career due to the scheduling flexibility, allowing you to continue to make an income while taking care of your family.
4) Work with a financial professional who understands you
Last but certainly not least, it's important to work with a financial professional who will take the time to get to know you, your needs, and your long-term goals. Women tend to have a more conservative investing style than men and are less likely to focus on building wealth. Working with a financial professional that will show you the power and abilities of the products that are out there, and show you how you can harness them to achieve the goals you have in your life is your biggest asset.
Unfortunately, none of us has a crystal ball to enable us to see what the future holds. But having a plan in place to ensure that you will be protected no matter what life throws at you is invaluable. These strategies can bring women stronger financial security if retirement arrives earlier than planned.
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Ready to start your back-up plan?
Call Tenaya Insurance Services today at (925) 322-8073, we're here to help!
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