Ladies we often face special challenges when planning for retirement, and for this reason you’ll need to make retirement planning a priority or else you’ll be stuck eating cat food and Ramen noodles during your golden years. This is because our careers are often interrupted to care for our children or elderly parents. Consequently, women may spend less time in the workforce and earn less money than men in the same age group. As a result, our retirement plan balances, Social Security benefits, and pension benefits are often lower.

In addition to earning less, women generally live longer than men, and they face having to stretch limited retirement savings and benefits over many years. To meet these financial challenges,

Start saving now
To maximize your chances of achieving a financially secure retirement, start with a realistic assessment of how much you’ll need to save. If the figure is substantial, don’t be discouraged–the most important thing is to begin saving now. Although it’s never too late to save for retirement, the sooner you start, the more time your investments have to grow. The chart below shows how just $2,000 invested annually at a 6% rate of return might grow over time:

Investment Vehicle Options: Compare Retirement Plans

The table below provides a good starting point to compare plans such as 401k vs IRAs. Pay special attention to the tax treatment of each plan as you’ll need to know this going into which ever plan you choose.

Save as much as you can–you have many options
If your employer offers a retirement savings plan, such as a 401(k) or a 403(b), join it as soon as possible and contribute as much as you can. It’s easy to save because your contributions are deducted directly from your pay, and some employers will even match a portion of what you contribute. If your employer offers a pension plan, find out how many years you’ll need to work for the company before you’re vested in, or own, your pension benefits.

Women struggling to balance work and family sometimes shortchange their retirement savings by leaving their jobs before they become vested in their pension benefits. What does that mean? This means that women should be “taking charge of their futures in a more forceful way that accounts for their unique set of risks,” according to a study from the MetLife Mature Market Institute and Scripps Gerontology Center at Miami University.*

Keep in mind, too, that because your pension benefits will be based on your earnings and on your years of service, the longer you stay with one employer, the higher your pension is likely to be. Most employer-sponsored plans allow you to choose from several investment options (typically mutual funds).

If you have many years to invest or you’re trying to make up for lost time, give special consideration to growth-oriented investments such as stocks and stock funds. Historically, stocks have out performed bonds and short-term instruments overtime, although past performance is no guarantee of future results.

However, along with potentially higher returns, stocks carry more risk than less volatile investments. A good way to get detailed information about a mutual fund you’re considering is to read the fund’s prospectus. It includes information about the fund’s objectives, expenses, risks, and past returns. Keep in mind, it is always wise to contact a financial professional or attorney for advice on retirement income.

Save for retirement–no matter what
Even if you’re staying at home to raise your family, you can–and should–continue to save for retirement. If you’re married and file your income taxes jointly, and otherwise qualify, you may open and contribute to a traditional or Roth IRA as long as your spouse has enough earned income to cover the contributions

This article was submitted by Thomas Schwab, Financial Advisor at Raymond James Financial Services.

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