5 Moves Every Woman Should Consider Before Retirement
5 Moves Every Woman Should Consider Before Retirement
May 23, 2024 by Jennifer Taylor
Retirement should be relaxing. However, it’s hard to relax if you’re weighed down with financial woes.
As a woman, you probably spend much of your life taking care of others. However, you also need to take care of yourself, which includes ensuring your finances are ready for retirement.
Whether you’re planning to retire in the next few years or the next few decades, you’ll need to do a lot of planning. The more prepared you are, the better your chances of being in a good financial place to enjoy your golden years.
Wherever you are in your journey, here’s a look at five moves every woman should consider before stepping away from the workforce.
1. Estimate How Much You’ll Spend in Retirement
You can’t know if you have enough saved for retirement without estimating the amount you’ll spend each year.
Generally speaking, people tend to spend 55% to 80% of their current income each year in retirement, according to Fidelity®. Of that, approximately 15% of expenditures are healthcare related2.
Therefore, if your ending salary was $100,000 per year, you’ll likely need $55,000 to $80,000 per year in retirement — including approximately $15,000 in healthcare-related expenses.
It’s also important to think of the lifestyle you desire in retirement, as this will largely drive your cost of living. For example, you might save money by no longer having to commute to work and downsizing to a smaller home, but you could also spend more with frequent travel or buying a vacation home.
There’s no one-size-fits-all approach to retirement spending, so take the time to customize your plan to fit your lifestyle.
2. Devise an Income Plan
Right now, you pay for your expenses with your weekly, bi-weekly or monthly paycheck. However, this steady paycheck will come to an end when you retire.
Chances are, you’ll have a variety of income streams in retirement — Social Security, perhaps a pension, an annuity, a 401(k), etc. This is great, but you’ll need to figure out which accounts you’ll be tapping to pay your monthly bills.
It can be wise to work with a financial planner on this, as they can help you create a plan that minimizes taxes, while maximizing future earnings. This will ensure you’re truly getting the most from your money.
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