Retirement Planning and Tips for Women

Peter, good to see you.

Welcome back, everyone. Today, we are talking retirement planning for women. A recent study found women are far less financially prepared for retirement compared to men. According to Transamerica, men have more than double the retirement savings of women.

Of course, Peter, we know this. There are several factors that contribute to that discrepancy, the wage earnings gap, women are more likely to be caregivers, and they're more likely to have professional interruptions. But even if they're not working, you suggest they contribute to an IRA.

So how does that work? Yeah, and first off, this is a delicate subject for me to tackle because we're talking about how women need to plan financially for retirement coming from a male's perspective. So I get that and I don't want to stereotype or make gross generalizations or assumptions here, but there are some facts in this consideration. And one is that life expectancy for women is longer than life expectancy for men. And so we do need to plan for a longer duration, and we need to plan for wealth transitions a little bit differently for women than we do for men.

So how can we get there? How can we make as much progress as possible, even if we may be a homemaker or not in the workforce? Well, if there is one homemaker not in the workforce, then typically the other spouse is in the workforce. And if they are able and capable, we still want to do as much retirement savings and planning as possible so you can make what is called a spousal IRA contribution. That is that there are two people in a household, only one is earning that income. The other is not disqualified from being able to save for retirement. They can do so based off of the earner's income, and that earner can make contributions into both IRAs. Whether it's traditional IRA or Roth IRA, it basically doubles the contribution limit in any single year that you could get into household retirement accounts. So it is an opportunity because we certainly need to do as much as possible for planning for a more stable, secure, confident retirement.

And part of that is taking advantage of the opportunities where we have them. The spousal contribution is one place where a lot of people overlook this opportunity and don't get as much into retirement accounts because they are not aware that a homemaker spouse or one that's, you know, child caretaker is eligible still to make those contributions based off the fact that there is household income. So I was surprised, this same report from Transamerica found that 43% of men use a financial advisor to help them manage their savings, just 34% of women do. But of course, working with an advisor could help women for many reasons.

Just talk me through that, please. Well, again, the life expectancy for women is longer than men. And where planning really, really pays off in benefits is usually not the first few years of retirement. We could all spend money in the first few years of retirement. How do we know that the money is going to last throughout the last years of retirement? And a lot of times, statistically, women are the ones that have made it to those last years of retirement. So we've got a plan for two transitions and plan specifically and effectively for the assets and the retirement accounts and the income to not only go from a joint couple household to a single household with the survivor, whether that be man or woman or whichever spouse may be the survivor, we want them to be financially confident as possible during their lifetime.

But then a second transition with whatever's left over transitioning on beyond the lifetimes of the two primary planners. So planning is very important here. We've got to both be on the same page and maybe one person has sort of taken on this role as this is my job within the dynamic of the household. But that that person whose job it is not should not be in the dark about things. They should be very well aware and involved in that process as well. Because if I am doing this for the household, I'm doing my household no favors by leaving them clueless as to what has gone on. They need to be involved, everyone in the planning dynamic, including children, by the way. This is another separate conversation. But talking to kids about money and values and what we've done financially is also important.

But between spouses, it is essential that everybody within that couple household is on the same page, at least aware of what is going on and how to pick up the pieces and continue moving forward with the plan. Do you think, Peter, it goes back to the thought that some people have that you need a lot of money to work with a financial advisor? Well, I think that... A lot of people say, I don't have enough money to work with a financial advisor.

Yeah, that's a misconception. I mean, whatever money you do have, you need to plan well with it. You need to plan effectively with it. And maybe it's not a huge amount of assets under management, but that's not the way that the dynamic with financial advisors always works. How that relationship is structured isn't that I am managing every dollar that a client may have. Maybe they just come to me for advice and direction and what should I do about this or that?

And then you go and execute on those directives or those suggestions or recommendations. And between a household, again, if one spouse has assets to their name and the other one has not been working, so it doesn't have the 401ks, doesn't have those kinds of accounts, well, assets between a household are A to B and B to A and generally co-owned even if the IRS considers retirement accounts always individually owned. That's not the way that it works within a household dynamic. And so wealth will be transferring from one spouse to the next. And even if there's not a tremendous amount of household assets, that makes every financial decision that we make as we prepare for retirement that much more important because we've got to make the most out of each and every dollar and each and every potential retirement tool that we have available.

So one more stat for you here, Peter. 33% of women do not have a retirement strategy versus 18% of men. But as you keep saying, women live longer than men. We really need a retirement plan that accounts for longevity.

Yeah. And there are a lot of financial decisions and tools and aspects that play into how this is a travesty of a stat here. This should not be the case because social security has implications on a surviving spouse. Social security will disappear for the person who has passed away. The survivor assumes the higher of the two benefits. This is something that we need to know and be aware of as we are planning for retirement on the front end of retirement. A lot of times there are medical expenses toward the end of life, which can be pretty expensive. And it's oftentimes not the person that is having that medical situation that ends up suffering the most.

It's the person who had provided care, who would drain down the assets to provide that care, and then ends up with many more years of healthy life thereafter, where they've depleted the assets that equally, if not suffers even more. So we need to consider all of these things and the variables that go into it very carefully. But bottom line, everybody could benefit from saving a little bit more because we don't know how long we're going to last. And in retirement, we've only got that finite amount of money, that unknown amount of years. But for women specifically, that unknown amount of years is several years longer. And so we need to plan even more carefully. We've really got to stress and emphasize how that plan is going to last, survive, transition, and give us confidence in being able to spend and enjoy life, too, right?

Because it's not he or she that dies with the biggest pile of money. It's he or she that enjoys life with confidence and lives the life that we intend to live across our retirement years. Well, I will vouch for you, Peter, since I know you can't probably humbly brag enough, but great father, great dad, spouse, so all of the above. It's definitely worth speaking to you and or a professional. So Peter, how can somebody get a hold of you if they have questions about starting their own retirement plan?

Give me a call, 919-300-5886, 919-300-5886. And I appreciate that brag, Erin. And I try to help anyone that I can. Like that is my goal. I know that there are advisors out there that I won't even talk to you unless you've got a certain amount of assets saved. I think everybody deserves to feel confident about their financial and retirement picture. And everybody has the ability to feel more confident with good information. And that's what we strive to try to provide there. Now, can I help everyone as far as like an ongoing relationship?

Not everyone, but I can give almost anyone some thought, some direction, some idea of some ideas or strategies that may improve their financial outlook. A little bit of direction can go a long way in feeling more confident. Yes, yes. All right. Well, Peter, again, thank you so much for your time. I appreciate talking this through with you. Absolutely. And I don't know if I got sidetracked there, gave the number, but give me a call, 919-300-5886 is the number to call, 919-300-5886.

And I'd be happy to hear from you, speak with you, help you any way I can. Perfect. Peter, thank you. Thank you.

Hey everyone, Peter Rochon here. Hope you enjoy the content. As always, make sure that you like, subscribe, share the videos with others that may find this information helpful. And as always, you're welcome to be in touch or to submit questions or comments. You can comment below the video anything that you'd like to see or hear shared on our YouTube channel and in future videos. If you've got a topic that you've been thinking about or is of concern for you financially, be sure to let us know. We'd love to help you by discussing it on the channel. So appreciate the continued views and the likes and the subscribes, the shares, the comments, always helpful. We look forward to getting you the information that you need.

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