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Fellow Women – Bring Together Money and its Meaning in Your Life

Five months into a quieter isolated life, many of us have taken to online yoga classes, healthier home cooking, and meditation as ways to deal with the disruption. But as you strive to bring peace into your life, are you at peace with your financial future?

Numerous studies report that women are inadequately prepared for retirement. This may be the perfect time to reflect on using your investments to improve your confidence level in your own preparedness.

Here are three steps to get you started:

1. Think about overall financial strategy.

Developing a solid strategy is a process, beginning with understanding your current financial condition. Also identify your goals, understand your risk tolerance, and determine how your current investments work together (or not) to prepare you for the future.

All too often, people invest incrementally without considering how their investments are comprehensively allocated. This is particularly true when you have multiple accounts, including retirement plan balances with former employers, or rollover IRAs, as well as taxable accounts. It is important to take a broad view of the bigger picture, because the interaction among savings and various investments can determine success. You may find that changes are needed, especially if you haven’t focused on this recently.

2. Take full advantage of retirement plans.

Vanguard’s How America Saves 2020 estimates that a typical participant should target a total contribution rate of 12-15%, including both employee and employer match contributions, in order to achieve retirement readiness. In 2019, the average woman and her employer contributed 10.1% (1) Check on your total contribution rates and increase your employee portion if you are not already at the maximum annual amount ($19,500 for 2020). Don’t forget about the additional “catch up” contribution ($6,500 for 2020) if you’re 50 or older.

For married women who have decided to discontinue employment, check into the qualifications and benefits of a Spousal IRA so that you can advance your retirement plan savings.

3. Get more engaged in your financial future.

If you feel a need to be more engaged with your finances, especially your investments, then you are on the right track. Career opportunities for women have increased dramatically over recent years, but we remain challenged in retirement preparation. It may not be your area of expertise, so every chance to increase your learning about savings and investments improves the likelihood of reaching your goals. Working with a professional? Make certain you trust them and that they take the time to discuss with you the underlying principles of investing.

Life is unpredictable. The time we spend today in preparing for our tomorrows will be well worth it, and will enable us to bring together our money and its meaning into our lives.

Stay well, and stay tuned…