With longer life spans, women face different financial challenges than men. Here are a few tips women should consider to help create the financial cushion they need:
- Contribute to your employer-sponsored retirement plan. Contribute as much as you can possibly afford to your 401(k), 403(b) or 457(b) retirement plan at work and increase your contributions each time your income increases. Your retirement plan provides you with tax-deferred earnings and a variety of investment options.
- Consider purchasing life or long-term care insurance. With millions of Baby Boomers joining the ranks of the elderly, the costs of long-term care are expected to skyrocket. And with many women acting as caretakers, the financial burden can fall on their shoulders. Shop around for a company with favorable rates, but keep in mind the financial strength of the insurer. It’s important the insurance company is financially strong decades into the future.
- Maximize your IRA contribution. Even if you have a 401(k) or other employer-sponsored retirement plan, you may be eligible to contribute to a traditional or Roth IRA.
- Invest for growth. Studies have shown that, in some ways, women are better investors than men. Women tend to do less buying and selling, which cuts down on fees and expenses, and women also are more likely to look at the “big picture,” which translates into better long-term investment decisions. However, women seem to invest more conservatively than men, and conservative investments typically do not produce the growth achieved by more aggressive investments. Of course, you want to stay within your individual risk tolerance when you invest, but be aware that investing too cautiously could slow your progress toward your ultimate goals.
By following these suggestions, you can greatly help your pursuit of financial security. So invest early, often and wisely — you’ll be glad you did.
This article is provided by RBC Wealth Management on behalf of Pamela J. Carty, a Financial Advisor at RBC Wealth Management, and may not be exclusive to this publication. The information included in this article is not intended to be used as the primary basis for making investment decisions. RBC Wealth Management does not endorse this organization or publication. Consult your investment professional for additional information and guidance.
RBC Wealth Management, a division of RBC Capital Markets, LLC, registered investment adviser and Member NYSE/FINRA/SIPC.
