Mapping Your Retirement Plan

Retirement Planning

  • When to retire
  • Can you retire early?
  • How much you will need
  • Strategies for outliving your money

Women and men face many of the same challenges when planning for retirement. But women, because their careers are often interrupted to care for children or elderly parents, may have spent less time in the workforce and earned less money than men in the same age group. As a result, their retirement plan balances, Social Security benefits, and pension benefits could be lower. In addition to earning less, women generally live longer than men, and they face having to stretch limited retirement savings and benefits over many years.

To meet these challenges, we can help map our your retirement and make planning a priority.

Kick up your savings

To maximize your chances of a financially secure retirement, start with a realistic assessment of how much you’ll need to save. If the figure is substantial, don’t be discouraged — the most important thing is to begin saving. Although it’s never too late to save for retirement, the sooner you start, the more time your investments have to grow. As the old saying goes: “When is the best time to plant a tree? 20 years ago. When is the second-best time to plant a tree? Today.”

The chart below shows how just $2,000 invested annually at a 6% rate of return might grow over time:

Age you begin saving for retirement: Amount you’ll have saved by age 65:
20 $451,016
30 $236,242
40 $116,313
50 $49,345
60 $11,951

Note: This is a hypothetical example and results assume reinvestment of all earnings and no tax.

Options for saving as much as you can

If your employer offers a retirement savings plan, such as a 401(k) or a 403(b), contribute as much as you can. It’s easy to save because your contributions are deducted tax-free directly from your pay, and some employers will even match a portion of what you contribute. If your employer offers a pension plan, find out how many years you’ll need to work for the company before you’re vested in, or own, your pension benefits.

Women struggling to balance work and family sometimes shortchange their retirement savings by leaving their jobs before they become vested in their pension benefits. Keep in mind, too, that because your pension benefits will be based on your earnings and on your years of service, the longer you stay with one employer, the higher your pension is likely to be.

Most employer-sponsored plans allow you to choose from several investment options (typically mutual funds). If you have many years to invest or you’re trying to make up for lost time, give  consideration to both dividend-oriented and growth-oriented investments such as stocks and stock funds. Historically, stocks have outperformed bonds and short-term instruments over time, although past performance is no guarantee of future results. However, along with potentially higher returns, stocks carry more risk than less volatile investments. A good way to get detailed information about a mutual fund you’re considering is to read the fund’s prospectus. It includes information about the fund’s objectives, expenses, risks, and past returns.

If you qualify, you may open and contribute to a traditional or Roth IRA as long as your or your spouse has enough earned income to cover the contributions. Both types of IRAs allow you to make contributions of up to $5,500 in 2018, or, if less, 100% of taxable compensation. If you’re age 50 or older, you’re allowed to contribute an extra $1,000.

Blue Spark Capital Advisors

We're a fee-only Registered Investment Advisory and financial planning firm based in New York City and the Berkshires.

We specialize in working with women after divorce, death of a spouse, or other life transitions such as retirement or job change. We provide financial planning and investment management services.

We believe in a holistic approach. Movement in each piece of your financial plan impacts the others, so we consider your entire picture.

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Contact Us

41 Madison Avenue (40th Floor)
New York, N.Y. 10010
(212) 537-3899

93 Church Street
Lenox, Mass. 01240
(413) 551-4445

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