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  • Archive for the ‘Savings’ Category

    Taking the First Step towards a Secure Financial Future

    Monday, February 1st, 2016

    CalculatorNow that the confetti has settled from New Year’s Eve celebrations, tax season is upon us, and you may have noticed a familiar document in your mailbox: your W2s.  Although preparing taxes can be an extra strain on what is an already busy schedule, it also presents an annual opportunity to evaluate your finances and think about long-term financial planning.

    Unlike not paying your taxes, nobody will come after you if you’re not planning for retirement—but that doesn’t make it any less essential. Failing to think about how you will continue to finance your lifestyle once you are no longer working can spell disaster in the final stages of life. The I’ll worry about it later attitude can mean putting off planning until it is too late.

    Facing retirement planning head-on can be daunting, but taking the process step-by-step can ease the intimidation factor. The first step in long-term financial planning is figuring out, based on your current financial picture, the difference between your expected retirement income and need. If this figure is calculated early, there will be plenty of time to take steps to close that gap. Research by EBRI shows that those who take the time to calculate that number- regardless of its size- feel more confident in their ability to afford a comfortable retirement.

    If you are married or have a partner, do this exercise together. However, women are likely to live longer than their spousesso keep in mind how your retirement income might change if your spouse passes away.

    The first step in calculating your expected retirement gap is totaling your expected sources of retirement income. There are usually three sources of retirement income, often referred to as the three legged stool: Social Security, employer-provided pensions or retirement plans, and personal savings and investments.

              1. Social Security: Social Security is an important source of retirement income, especially for women. To find out your Social Security benefit, sign up for an account at www.ssa.gov/myaccount.

              2. Pensions and Retirement Plans: Traditional employer-provided pension plans offer you a set amount each month after your retirement based on your salary and how many years you worked. 401(k) and 403(b)-type plans allow you to invest money in a fund that you will have access to when you retire.

              3. Personal Savings and Investments: Personal savings and investments may be spread throughout a number of accounts. This could include your home, however, since it is not a liquid asset, be careful how you calculate it, and consider whether you plan to rent or sell it after retirement.

    Refer to page 11 of WISER’s Financial Steps for Caregivers booklet for a worksheet that will help you add up your sources of retirement income.

    The second step in calculating your expected retirement gap is figuring out how much you will need in retirement. Many experts recommend expecting to need at least 85% of your pre-tax income in order to maintain your current living standard. WISER instead recommends 100% to take into account the longer life spans of women and to safeguard for unexpected healthcare costs.

    Calculate the difference between the numbers you found in steps one and two to find the gap between your retirement income and need. The good news is there are many easy-to-use online calculators that can help you with these steps. Check out the calculators tab at www.retireonyourterms.org for a variety of retirement planning tools. Once you have that number, you can begin to take steps to close the gap, such as prioritizing investing and finding more ways to save.

    Whether you feel you are over-prepared or woefully unprepared for retirement, acknowledging the current state of your finances is a crucial first step towards achieving security during your later years of life.

     

    Grandma’s Wisdom: Lessons about Saving and Retirement

    Sunday, September 13th, 2015

    By Kassie Barroquillo, former WISER Research Associate

    September 13th is Grandparents Day – a day when we can celebrate our grandparents and those people in our lives who fill that role. One reason to celebrate is because grandparents can provide us with wise advice based on their own years of experience. This year, WISER asked grandmothers at all stages in their lives for advice they would give their grandchildren on saving and retirement.

    Saving Early

    Linda, a grandmother of a four- and a five-year-old, said, “Every time you get any money try to save some back, even if its small amounts.” She also added that she hopes her granddaughters start saving early, so they can retire. Penny wanted her two grandchildren, seven and nine, to remember that “no amount is too small to begin saving.”

    Want to help younger children learn about the importance of saving and planning for the future? WISER has a children’s book called “Sonja Meets Her Future Self,” which teaches kids the valuable lesson of Save, Spend, and Give.

    Budgeting

    Barb, who has three grandsons between the ages of three years and three months, said they should add retirement savings to their budget. Gayle, who has three grandchildren between the ages of 10 and 19, added that they should discern between “what you need versus what you want.”

    WISER has two budget worksheets, if you want to start building your own budget: Simple Budget Worksheet and Detailed Budget Worksheet.

    When the Grandkids Grow Up

    Retired grandma to a four- and a five-year-old, Barbara, said “My advice is to save money, comparison shop, buy quality items, and to save a portion of all your pay for a ‘rainy day’…and always take advantage of employer savings programs like 401k.” She also added that if you have the means, use a financial advisor. Michelle, who has two grandchildren, ages two and four, echoed Barbara, “Definitely invest in a 401k for retirement!”

    WISER has an entire page dedicated to 401k’s here! Don’t have access to a 401(k) Plan? Learn more about other ways to save for retirement.

    A Little Advice from my Grandmas

    I asked my own grandmas what advice they would give me. My Grandma Greta has 13 grandchildren, three great grandchildren, and one on the way, between the ages of two and 38. She said I should be sure to “have enough money saved to plan for inflation. It is more than you think it’s going to be.” She also said I should consider investing in property.

    Learn more about inflation and ways to invest your savings in The Beginner’s Guide to Saving and Investing.

    I am the oldest of my Grandma Wilma’s four grandchildren at 26, with the youngest being 13. She said, “Save money in a 401k or IRA while you are working. I’ve been saving my money the entire time I’ve been working, so I will be able to live, hopefully, without depending on anybody.” She added that she always had money taken out of her paychecks and always put it in a retirement fund. Most importantly she never borrowed from it.

    To find out more about IRAs and what happens if you borrow early, see this page from WISER.

    Thanks to the grandma’s who contributed their words of wisdom and happy grandparent’s day to all!

     

    Campaign for a Secure Retirement: March Blog Series #3

    Tuesday, March 31st, 2015

    What Working Women Need to Know

    As Women’s History Month comes to a close, we celebrate all the incredible accomplishments and contributions that women have made and continue to make in every area of life.  The working world is no exception.  Yet despite gains in education and employment, statistics still show that women are paid less, have less money in savings, and are ultimately more likely to experience poverty in old age.  While some barriers to financial security are systemic, other barriers result from simple inaction or lack of information.  Working women are busy women, but we can’t ignore our retirement planning.  We all want to live with dignity and security in our later years, but that doesn’t come without proper planning and saving right now.

    A great place to get started is by making sure you can answers some key questions about your own retirement plans, as well as any plans your spouse or partner may have.  WISER’s “Working Woman’s Retirement Plan Checklist” can get you started.  Understanding your Social Security benefit is also an important part of this process.  You can access your Social Security statement online by setting up an account at “my Social Security.” Getting an estimate of your future Social Security benefits can help you figure out how much more you will need to save in order to have enough income in retirement.

    Social Security ArchMany employers provide a variety of benefits that go beyond the two biggest — health care and retirement plans.  Additional benefits may include: life insurance, disability insurance, long-term care insurance, and flexible spending accounts.  In the changing world of do-it-yourself retirement, it’s up to you to know what your employer provides, and take advantage of those opportunities that can protect your financial future.  For tips and ideas about how to make the most of your company benefits, check out WISER’s brochure, “20 Ways to Take Advantage of Your Company Benefits Plan.”

    If you do not have retirement benefits through your employer, considering opening an Individual Retirement Account (IRA), or learn about other ways to save and invest.  Our first blog in this series covers some of this information in more depth.  If you missed it, check it out now.

    Women also continue to be the primary caregivers, and many working women at some point in their lives may find themselves faced with having to reduce work hours or leave a job entirely in order to care for an aging parent or relative.  While there may not always be a choice to leave a job, it is important to do all you can to keep your own financial well-being on track while caring for someone else.  Use tools like www.benefitscheckup.org  to see if your care recipient is eligible for other benefits and services that can help cover some of their costs and service needs.  Engage other family members in the care planning process in an effort to share both the physical and financial responsibilities so that they are not all placed on any one single person.  For more tips and resources, download “Financial Steps for Caregivers: What You Need to Know about Protecting Your Money and Retirement.”

    Thank you for joining our Women’s History Month blog series.  Let’s all make a little history ourselves in the coming year by planning, saving and getting on track for a secure financial future!

     

    The “Campaign for a Secure Retirement:  Helping Millions of Americans Plan and Save for Retirement”  is a joint educational retirement campaign to encourage retirement planning and saving and to promote the online Social Security Statement, available through my Social Security, as an important retirement planning tool.  Campaign partners include the Social Security Administration, America Saves, American Savings Education Council, and WISER.  If your organization wants to help others understand the importance of saving for retirement, take our pledge

    WISER

    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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