Working Women:
Make Sure the Future Is Taken Care Of…
We all find it hard to plan for the long term, yet women face some unique challenges when it comes to planning for the future. Everyone needs to address the reality of living longer – and spending more years in retirement – but females tend to live even longer than their male counterparts. On top of that, there are valid reasons why some women may not be in a position to properly prepare for their financial future. To begin with, many women are still employed in settings that don’t offer retirement plans to employees. Also, many women leave the workforce to take care of their family for some time. They may have to work even harder and longer later in life to make up for the resulting “gaps” in income and pension coverage.
Make Saving for Retirement a Priority
The importance of preparing for the financial future applies whether you’re a single or married woman. The good news is that it’s never too late – or too early – to begin. If you are currently working, see how much you can afford to set aside each month. It is important not to fall into the trap of postponing retirement planning or leaving it solely up to a spouse.
Any financial planning decisions also should take into consideration what would happen in the event of divorce or widowhood. Although no one likes to think about these possibilities, the odds tell us that we must. According to the Women’s Institute for a Secure Retirement, nearly 30% of older (65+) single women – those who were never married or were divorced or widowed – are poor or near poor.[1]
Timing Is Everything
There are all kinds of financial products on the market that can help you accumulate funds for the future. One very important and popular product is fixed annuities, which also offer tax-deferred growth. Fixed annuities are popular in helping women address their needs. There are several solid reasons for this choice.
Fixed annuities are flexible, tax-deferred vehicles that can be used to help achieve long-term financial goals and provide a source of retirement income. There are several distinct advantages to investing in fixed annuities. With a deferred fixed annuity, the money you put in accumulates tax-deferred, which means that taxes are paid only when you withdraw the money, not as your earnings grow. (Any withdrawals made prior to age 59 ½ may be subject to a 10% IRS penalty tax.) This may allow your money to accumulate much faster than it might in a comparable, currently taxable investment.
In addition, a fixed annuity can provide you with flexibility. With many fixed annuities, you can add to your policy as your finances permit, and you can even arrange for systematic contributions to be deducted directly from your checking account. Lastly, many fixed annuities offer a guaranteed death benefit feature that may allow the annuity proceeds to be passed on to your loved ones outside of your estate. Similar to this in some regards is the use of permanent life insurance which offers many similar benefits which can add versatility to your game plan in dealing with the current and future economic climate.
Take Control of Your Future 
Fixed annuities are designed to help you accumulate money for your retirement, but they can also help meet your needs during many stages of your life. For women – who are at greater risk for poverty during their retirement years – it is especially crucial to start planning now. Fixed annuities can help provide the peace of mind and security you need for the future – so you can concentrate on today.
For more information on how fixed annuities and life insurance can help you prepare for your retirement, please contact Troy Barrow, Arlington Insurance Planning Services at (646) 580-5189 or tbarrow@aipsny.com.
[1] Impact of Retirement Risk on Women, Women’s Institute for a Secure Retirement in conjunction with the Society of Actuaries, October, 2006.
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