Women Must Invest their Retirement Savings

July 9, 2010

 

Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.
~Will Rogers

All kidding aside, I know that investing can be risky. But, Will Roger’s solution will not work for us. I just some alarming statistics about women and investing.  Only 25% of the women surveyed buy and sell stocks or mutual funds. And, only 48% of women will be relying on their investments for retirement!

So, ladies in the 75% and 52%, are you planning to rely solely on social security to fund your retirement?

Let me disabuse you of that notion. The average social security retirement benefit for those who retired in 2009 is $1153 per month. Just ask yourself what your current monthly budget is. Then answer the question, can or do you want to live on the monthly amount that Social Security alone will provide you for the rest of your life? For most of us the answer will be  a resounding, no! 

If you have worked for several years already, you will be able to calculate your current retirement benefit.  You can check your retirement benefit at: http://www.ssa.gov/estimator/

 In fact, if you are older than 25, the SSA is already sending you a retirement benefit summary every year. The summary is sent 3 months before your birthday. Review your benefit information. Save this information with your financial paperwork .

The 1/3rd

The reality is that Social Security realistically may only give you up to 1/3 rd of your retirement income. -Of course, this may change (for the worse) as the baby boomers (r)age through the Social Security system.

 The other 2/3rds

  1.  401(k)s, IRAs, SEPs, 404(b) s, etc. are supposed to give us another 1/3rd.
  2. And, our personal savings are supposed to give us the final 1/3rd.

Ladies it is past time for you to trade in your piggy banks for stocks, bonds, mutual funds or ETFs. The only way to keep up with inflation is to invest your money. 

Your goal is to maintain or better your spending power by beating inflation. Even if you don’t have much saved, consider the riskiness of not investing. We are responsible for providing 2/3rds of our own retirement income. Long term investing is the way to grow your money.

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020

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Financial Planning for Women: Feel the Fear and Continue to Invest

July 1, 2010

If you listen to television and radio or read newspapers, newsletters, magazines etc., you might be led to think that our financial world is teetering on the edge. Yes, economic times are quite difficult worldwide.

However, realize that whether ‘times are good or bad’ ,we are always teetering on the edge of a change in the financial markets. But with good reason, we simply feel better about impending market movements when times are good. Our optimism powers us forward.  Many of us are probably secretly thinking/hoping that an upward market trend will go on forever.

Since the market free fall of 2008, we are acutely reminded that investing is for the long-term and that ‘one size fit all’ investing does not work. Long-term investing is a turtle’s race. If you need your invested money in the next 10 years, the amount you need should not be invested in the stock market. Remember: Over the years, the stock market has always been a risky investment arena  -not just in 2008-2009.

Despite the recent ‘market mania’, now more than ever we must keep a balanced attitude when it comes to investing for our long-term futures. Women investors are notorious for investing too conservatively. And when fueled by fear, long-term investors (both male and female) may tend to make investment moves out of fear and not from a place of reasoned thinking.

So what should a woman investor do now?

  • Have a financial plan* 
  • Review your financial plan at least annually 
  • Stay the course with your financial plan
  • Increase your savings rate at every opportunity
  • Stop listening to the doomsayers in the media

*Your financial plan should always:

  • Match your time horizon
  • Match your risk tolerance

If your financial plan is right for your time horizon and risk tolerance, you will likely be able to continue to invest money in the stock market and sleep well at night.

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020


Overcoming Your Irrational Lizard Brain

June 25, 2010

 

Overcoming Your Irrational Lizard Brain. Great ‘to the point’ Q&A on how behavioral finance can help us watch out for ‘lizard brain’ reactions when making  investment decisions.

Shared by: Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020


The Product Guru: The Skinny on Target Date Fund Reform – Financial Planning

June 24, 2010

 via The Product Guru: The Skinny on Target Date Fund Reform – Financial Planning.

The Product Guru: The Skinny on Target Date Fund Reform  Financial Planning for Women and Men; Retirement Planning for Women and Men

Commentary by: Jane Nowak, Financial Planner for Women- MoneyGal2020

This article explains my concerns about ‘target date’ mutual funds. Target Date 2010 funds, lost about 23% in 2008, they were no fun during the market meltdown. In fact, in 2008 many of these funds were 50% in stocks and 50% in bonds with many owners within 2 years of retirement…As explained in the article, there was a logical reason for maintaining that asset allocation in a 2010 target date fund. Unfortunately, many investors had no idea or understanding of the reasoning behind holding a 50/50 investment split in their target date fund. So, they stayed invested in the 2010 Target Fund and rode their retirement savings part way down with the market.

Yes, hindsight is always 20/20. However, because many investors’ wealth is entirely/almost entirely held in retirement accounts, the 23% loss in value represented several years of retirement savings lost to the market plunge. This was devastating for many folks who thought they would be retiring this year! We are responsible for doing our own due diligence on the investments that we purchase or for hiring someone to keep to do the due diligence for us.

Always read fund information, monitor your fund’s performance and caveat emptor!

 Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020

 

 


It’s Never Too Late to Put Your Retirement Savings World in Order

June 16, 2010

Do the current economy, saving for retirement, not saving for retirement and the never-ending litany of financial ‘to-dos’ have you turned upside down? Are you part of the 52% of Americans who have not saved or are not currently saving for their retirement?

If you answered ‘yes’ to either or both questions, you are in luck. Now is always a good time to pick yourself up and begin putting your financial world in order. Currently, many Americans are going through an economic rebuilding of their personal economies. They are in the same situation (or a more challenging one) than the one that you’re in. So, you are definitely not alone.

The good news is that financial planning is a process. I liken it to a turtle’s race. You know that no matter what your financial challenges are -slow and steady wins the race. Many of us get knocked down or knocked back several times during our financial lives. No matter. Figure out where you are and begin or begin again. Remember to always keep going forward. Run the entire race with your eye on the goal. That is what’s important.

Some of the financial basics are:

Budget

  • Live within your means –If you can’t pay for it, don’t buy it
  • Have a written household budget
  • Stick to your written household budget
  • Pay off your credit cards ‘in full’ every month (See bullet #1)

Begin saving and keep saving

  • Set aside 3 to 6 months of savings for your rainy day(s)
  • Invest money using a 401(k), 403(b), IRA, Roth IRA, SEP etc.
    • If available, invest enough to get your full employer match
    • Raise your savings rate every year by at least 1%

It’s okay not to know

  • Know what you don’t know
    • No matter where you are with your financial life, when needed seek the advice of professionals 

It is never too late to add some (more) gold to your golden years. And, with ‘all things financial’, now is always the best time to start.

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020


Like I was Saying About In or Out of the Market…

June 2, 2010

WhatsNewAtICI ICI: Total estimated outflows from long-term mutual funds were $16.61 billion for week ended May 26. http://bit.ly/a7rppN

Shared by: 

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020


Individual Investors In or Out -Who Cares?

June 2, 2010

There is a saying in the investment world that goes something like this…If individual investors are on the sidelines, now is the time to buy. And, when individual investors are jumping into the market, now is the time to sell.
While there might be some substance in approaching the market this way, moneygal2020 says when investing into the market: ‘Now is the time to dollar cost average into the market.’ And moneygal2020 says when you are getting out of the market: ‘Now is the time to dollar cost average out of the market.’
Why use dollar cost averaging? Among some very good reasons is the fact that dollar cost averaging can help you keep your emotions from ‘helping you’ to make the worst possible investment moves.
In the long run, if you are jumping in and out of the market, transaction fees will hurt our overall return. Plus, jumping out of the market when it is down will only serve to lock in a loss. Yes, we lock in our loss, stay out of the market and miss the market recovery. You know, buy high, sell low??? Like I said. This is exactly the opposite of what we should do with our investments.
Predicting the ups and downs of the market is like trying to ride a bucking bronco – sooner rather than later you will be thrown.


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