#FemaleFinance: The Importance of Savings
The importance of having a savings plan can’t be stressed enough.
Women have an even greater need than men to begin saving as much as they can early in their careers, since they have a longer lifespan than men and typically earn less over their lifetimes.
The Women’s Institute for a Secure Retirement (WISER) recommends developing three sources of retirement income:
1) Individual savings
2) Social Security and a pension,
3) Retirement savings plan such as a 401(k).
What are simple things you can do now to save more?
- Strive to reduce the amount spent on common splurges such as daily lattes or going out to restaurants.
- Get rid of services you don’t use much, such as gym memberships or cable TV.
- Use your phone to find apps that can save you money, such as GasBuddy. You’ll be amazed at the savings.
Channeling these savings and putting them toward an IRA or 401(k) can help you reach your retirement goals. If you have access to a retirement plan through your work, a simple strategy for increasing the amount you save is to increase your savings each year by the amount of your annual raise.
However, saving for retirement can get derailed if you don’t plan for unexpected expenses or loss of income. Aim to have six months to a year's of expenses set aside in an emergency reserve to cover the unplanned costs without having to tap into your retirement savings.
For a personal review of your savings plan and emergency reserves, set up a time to chat with our office.