Top Ways Women Can Maximize Their Savings

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how women save money

Top Ways Women Can Maximize Their Savings

In my last article, I reviewed some critical differences between men and women when it comes to investment and lifetime earnings. It is easy to see that factors such as lower wages, different career arcs, and longer lifespans affect the approach women must take towards investing and retirement. Yet, many women who understand the need for different investment strategies still can’t get ahead.

Why? It’s simple: the deck is stacked against them.

In fact, according to Ellevest, a financial company dedicated to female-specific investment strategies, as many as 86% of financial advisors are men over the age of 50. Women who want to succeed in the retirement game therefore need take a different approach to how they play. Let’s take a look at some of the critical investment strategies that every woman needs:

Start Early

When it comes to good investment and large retirement nest eggs, the earlier you start, the better. This is true for both men and women. However, because of the high probability that a female worker will take at least some time out of the workforce in her lifetime (either for child or elder care), it is even more critical that she start saving immediately for retirement. Exploring investment options, such as Exchange-Traded Funds (ETFs), can be a wise choice. For additional insights into trading in various markets, you may find valuable resources at https://cryptoexchangespy.com/.

Consider, a woman who saves as little as $3,000 per year between the ages of 20 and 30, without further contribution, would have over $1.5 million by the age of 65 thanks to compound interest. By contrast, a woman who begins saving $3,000 per year at age 30, and continues to do so through retirement, would only accumulate $900,000. This assumes an average of 10% annual return on investment.

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But It’s Not too Late

Women who missed the boat on early investing are not lost. In fact, there is a very specific program designed to help late-in-the game 카지노사이트 추천 investors make up for lost opportunities for retirement savings. As anyone with a 401(k) or IRA knows, because of the tax benefits these accounts offer, there are limits to what you can save each year. Those limits are currently set at $18,000 and $5,500 respectively for 2017.

However, after age 5o, the rules change. Known unironically as “catchup contributions,” women who have been out of the workforce are a target market for these programs, since they may have little-to-no retirement savings up to this point. In 2017, catchup contributions allow any worker over 50 to contribute an additional $6,000 to a 401(k) and $1,000 to an IRA. Depending on how much longer you plan to work, this extra money can add up quite substantially.

Not Working Doesn’t Mean Not Saving

One mistake that many married couples make when it comes to retirement is assuming that only the full-time working spouse needs to save. Many women work for themselves, for example, or only work part time while their children are young. In this case, there is no work-sponsored retirement plan to fall back on. Stay-at-home moms are also “working” without pay and often forget to think ahead to retirement.

However, both SIMPLE IRAs and Roth IRAs are available for anyone, regardless of employment status. Plus, spousal contributions are completely acceptable. This allows couples to save another $5,000 per year towards retirement in an account in the woman’s name. For women with alternative employment situations, there are also Individual 401(k) accounts available which allow for an even larger savings.

Women Need Tailored Advice

One of the biggest differences between men and women when it comes to retirement is their focus on savings vs. investment. Because of women’s risk aversion, they tend to play it safe, opting for savings accounts and slow and steady investment products like mutual funds. However, the most successful female investors know that balance is key. It is important to make sure you keep the long game in sight.

Unfortunately, there is no magic formula that tells women how much is safe to invest vs. save and what investment strategies best fit their lifestyle and income. We are all different. That is why it is important for women to work with financial professionals like those who offer services such as FX Risk Management and, statistics show, overwhelmingly, they do. However, as the Ellevest study hints, the focus of those financial professionals may not always be on you.

You can visit E.A. Buck Accounting & Tax Services website if you’re looking for financial advisor that takes your gender – and all other aspects of your working life – into direct consideration. Your future (and your retirement) depend on it.

Full Article: https://monitorfx.pl/inwestowac/gieldzie/