Successful Retirement For Women

by Laura J. Brown

Summertime is right around the corner. Reminiscing about childhood summers brings fond memories of family vacations and carefree time spent with friends. While raising children, the summer months can feel chaotic with schedule coordination, weekly camps, and balancing your own work responsibilities. Then children grow up, move out on their own, and your retirement looms closer on the horizon.

What is your vision for retirement? Have you thought about how you want to spend not only your summers but all seasons in retirement?

Women who share money management duties with their partner tend to take on a lion’s share of the responsibility for the household finances. Yet only 18% of women feel very confident in their ability to fully retire with a comfortable lifestyle.6,7

Although more women are providing for their families, when it comes to preparing for retirement, they may be leaving their future to chance.

Women and College

The reason behind this disparity doesn’t seem to be a lack of education or independence. Today, women are more likely to go to college and graduate than men. So, what keeps them from taking charge of their long-term financial picture?3

One reason may be a lack of confidence. One study found that only 55% of women feel confident in their ability to manage their finances. Women may shy away from discussing money because they don’t want to appear uneducated or naive and hesitate to ask questions as a result.4

Insider Language

Since Wall Street traditionally has been a male-dominated field, women whose expertise lies in other areas may feel uneasy amidst complex calculations and long-term financial projections. Just the jargon of personal finance can be intimidating: 401(k), 403(b), Roth, RMD, fixed, variable. To someone inexperienced in the field of personal finance, it may seem like an entirely different language.5

If you have avoided discussing your long-term financial strategy, now is the time to pick up the reins and retake control. Consider talking with your trusted advisors at Happy State Bank and Trust Company to demystify financial and retirement terms. Don’t be afraid to ask for clarification if the conversation turns to something unfamiliar or move the conversation along for concepts you grasp. As an example, no one was born knowing the ins and outs of compound interest, but it’s important to understand in order to make informed decisions.

Compound Interest: What’s the Hype?

Compound interest may be one of the greatest secrets of smart investing. And time is the key to making the most of it. If you invested $250,000 in an account earning 6%, at the end of 20 years your account would be worth $801,784. However, if you waited 10 years, then started your investment program, you would end up with only $447,712.

This is a hypothetical example used for illustrative purposes only. It does not represent any specific investment or combination of investments.

Retirement Strategies

Preparing for retirement can look a little different for women than it does for men. Although today’s modern families tend to operate differently than the generation before us, women are still more likely to serve as caretakers than men are, meaning they may accumulate less income and benefits due to their time absent from the workforce. Research shows that 31% of women are currently or have been caregivers during their careers. Women who are working also tend to put less money aside for retirement. According to one report, women contribute 30% less to their retirement accounts than men.1,2

These numbers may seem overwhelming, but you can change the statistics. With a little foresight, you can start taking steps now, which may help you in the long run. Here are three steps to consider that may put you ahead of the curve.

1. Talk about money. Nowadays, discussing money is less taboo than it’s been in the past, and it’s crucial to taking control of your financial future. If you’re single, consider writing down your retirement goals and keeping them readily accessible. If you have a partner, make sure you are both on the same page regarding your retirement goals. The more comfortably you can talk about your future, the more confident you may be to make important decisions when they come up.

2. Be proactive about your retirement. Do you have clear, defined goals for what you want your retirement to look like? And do you know where your retirement accounts stand today? Being proactive with your retirement accounts allows you to create a goaloriented roadmap. It may also help you adapt when necessary and continue your journey regardless of things like relationship status or market fluctuations.

Sources:

1. Transamerica.com, 2021

2.GAO.gov, 2021

3.Brookings.edu, October 8, 2021

4. CNBC.com, June 8, 2022

3. Make room for your future in your budget. Adjust your budget to allow for retirement savings, just as you would for a new home or your dream vacation. Like any of your other financial goals, you may find it beneficial to review your retirement goals on a regular basis to make sure you’re on track.

WA clear vision for retirement will influence your chosen path, strategy, and time horizon. Take some time this summer to vision board your retirement goals and share them with those closest to you.

We recommend using your legal, tax, charitable, and financial advisors to help guide your specific retirement planning needs. Your trusted advisors at Happy State Bank and Trust Company look forward to working collaboratively and holistically with your advisory team. We value the voices of our female clients and are here to provide a safe space open to questions and discussions about financial and retirement planning.

Retirement may look a little different for women, especially since women live longer on average than men, but with the right strategies – and support – you’ll be able to live the retirement you’ve always dreamed of. As discussed, it’s never too late to plan for retirement, but the sooner you start the better.

5. Distributions from 401(k), 403(b), and most other employer-sponsored retirement plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 73, you must begin taking required minimum distributions.

6. HerMoney.com, April 12, 2022

7. TransAmericaCenter.org, 2021

Laura J. Brown, CAP, CTFA

Senior Vice President & Senior Trust Officer

Laura J. Brown joined Happy State Bank & Trust Company in 2022 as a senior trust officer and market director for Fort Worth and the Mid-Cities. She previously served as a trust and client advisor with The Northern Trust Company and managed agency and trust relationships utilizing comprehensive wealth management services for ultra-high-net-worth individuals, families and charitable entities.

Laura graduated from Texas Christian University with a Bachelor of Science degree in Advertising/ Public Relations and a minor in Business. While attending TCU, she interned for six months at a public relations firm in London, England, U.K. Laura went on to earn her Master of Business Administration from the University of Dallas in Irving, TX. She holds the Certified Trust & Fiduciary Advisor (CTFA) designation, Chartered Advisor in Philanthropy® (CAP®) designation, is a member of the Tarrant County Bar Association, past board member of the Dallas Estate Planning Council (DEPC), and past president of the DEPC Emerging Professionals. Laura is actively engaged with local community organizations, her children’s schools and her church. In her free time she enjoys traveling and spending time in the outdoors with her family.