I had an opportunity interview one of my good friends on Retirement Planning For Women. My friend, Beth Siegel, works for a large investment company and has been an investment representative for approximately 20 years +. She gave me an opportunity to interview her and I found that she made an outstanding speaker on advice for women on how to save for their retirement.
Here are the tips and a brief outline from what Siegel had to say about retirement investing for women:
First women must understand that Investing is emotional. It is tied to our mindset and sometimes we don’t plan far enough ahead for very personal reasons that can often be self-defeating. If you are one of those people then seek out advice from other women who have made the retirement decision to plan ahead.
Tie your savings and retirement goals to your personal goals. Examine what you believe your health may (or may not) be and whether or not the swimming or golfing or running a marathon goals are realistic and achievable in your retirement.
The 50-60 age group is deciding if they want to change careers, change their life goals, or stay in what they are doing right now. They are at that midway place in their lives where they are planning for their long-term goals.
Women need 20% more than men to retire because they are living approx. seven years longer than men.
Women tend to invest more conservatively than men because they fear losing their money.
– Instead of fearing losing their money, women REALLY NEED TO focus on whether they will run out of money. Siegel said that this should be their biggest fear instead.
– If you are too conservative with your investing then your savings won’t keep up with inflation.
– You’ll need 7.5-9% per year to retire.
– A diversified portfolio is the best and sticking with that is important!
– Currently, you can look to Social Security to provide about 12% of your retirement income. That’s about a tip for dinner.
– Can you afford to count on living on tip income?
– Be involved in setting aside money.
Regular IRA – Tax-free, but limitations in contributions are only $6,000.00 per year. If you have a company that pays retirement match, put the max amount in because that is free money to you.
For the self-employed there is opportunity to invest up to $40,000.00 per year from your gross income.
– This is possible because your company puts the money in for you (individual 401K).
– SEP – individual plan is calculated on net income and the savings is less than a 401K.
For employers with employees who work less than 20 hours per week, there are regular 401K options – ask a payroll company or advisor for more information on these plans.
– Safe Harbor Plans avoid age and wage restrictions and you can save the maximum amount of money.
If you have a windfall of money there is no real way to avoid paying taxes on it, so be smart with your goals and what your plans are for that money so that it lasts for you. Seek advice if you really don’t have a clue.
– Be smart about what you get because most people go through a windfall in two years.
– Control your destiny with your good choices.
Siegel told me that she thought that the next bubble would be in commodities, and that real estate investments (in the last 200 years) averaged 5%.
– Don’t try to time the market — Wait it out.
– Most people with a portfolio look better than the market, so don’t watch the market to predict your portfolio.
Siegel informed me that hedge funds will sell their portfolios back to the banks to pay their debt and there were huge corrections that happened in the marketplace as a result. Siegel says that is what was driving the market.
Siegel explained that are three cash strategies:
1. Long-term: If you have long-term goals, have your money working long-term.
2 & 3. Short-Term and Cash Flow: Plan your strategy and work your goals and plans around your lifestyle and what you need and want to happen. Plan for that money.
Siegel highly recommended, “Business Week Magazine,” and the book, “Wall Street Journal Complete Money & Investing guidebook,” by Dave Kansas – Used & new $4.55-$10.00.
And when it comes to retirement planning by watching the news, she had this to say,… “Watch the 6:30 news program on public TV for information, and don’t watch the media hype for money information.” She continued saying, “TV media hype is slanted, biased and mostly (just plain) ignorant.”
So, when you plan for your retirement take these tips into consideration. That way the twenty years you hadn’t planned on getting won’t have you looking for a job at your local fast food restaurant.