5 Retirement Basics for Women Who Want to Take Charge of Investing

When it comes to investing, it seems as if men traditionally have run the show.

When men worked and more women stayed home to take care of the family, it was the husband’s salary that went into savings, his pension and/or his 401(k), and his Social Security benefits that they would largely rely on someday. So when a couple sat down with their financial professional, the man usually did most of the talking.

That doesn’t mean women weren’t interested. Longtime financial professionals will tell you that a woman might sit quietly during their discussions, but when they left the office, many would have their say.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

But now, with so many women working, staying single and making more money, they’re getting more involved from the get-go — often scheduling appointments and coming in to ask for help.

This is a good thing. Given that the average woman can expect to outlive her husband by at least a few years, it’s always made sense to take her longevity and other concerns into account when drawing up a financial plan.

But I like working with women for other reasons. That old stereotype that women aren’t afraid to ask for directions? It definitely holds true with financial advice. A lot of men will sink the ship rather than give up the wheel. Women also tend to be more realistic about returns and careful about the risks they should take in retirement.

If you’re a woman who’s new to investing, the best tip I can give you is to not be intimidated by your husband, your financial professional or the process. Ninety-two percent of the women surveyed for the 2015 “Fidelity Investments Money FIT Women Study” said they were eager to learn about financial planning, but only 47% said they were confident talking about money and investments with a professional.

Be ready to explore all the options that are available to you, and learn as much as you can about the basics, including:

1. Making a plan.

Most successful endeavors require proper planning. Retirement is no different. You and your financial professional should have a clear set of short- and long-term goals to help guide your savings strategies. Be realistic regarding the lifestyle you expect to have, but don’t be afraid to talk about your dreams and passions. If you’re married, it’s important that you include your spouse in these discussions so you can prioritize your goals and work toward them together. Review your progress regularly.

2. Protecting your money.

Your financial professional can help you determine the appropriate amount of risk based on your age, your comfort level, how much guaranteed income you’ll need and other factors. A solid retirement plan and a diversified portfolio can help guard your assets so unforeseen events don’t take a toll on your future.

3. Maximizing your income and cash flow.

Your retirement income will come from many sources, including your pension (if you have one), Social Security, any annuities you might have and investments. There are withdrawal strategies that can make the most of those dollars. If you’re married, talk to your financial professional about the best way to file for Social Security, and if you or your spouse has a pension, discuss survivorship options.

4. Keeping tax-efficiency in mind.

Taxes can eat up your retirement savings if you don’t have a smart strategy in place. Most people expect their taxes to go down in retirement, but that isn’t automatic. And Uncle Sam can’t wait to get his hands on all that tax-deferred money in your 401(k) or 403(b). The order in which you tap your income streams will affect your bottom line, so be sure taxes are part of your overall plan.

5. Avoiding years of lost savings.

A market downturn at the wrong time can have serious consequences for your retirement accounts. If you lose money early in retirement, and you’re taking income instead of putting money in, it can be difficult to recover. Balance your desire for high returns with your need for less risk, and ensure you develop a financial strategy accordingly.

It’s never too early or too late to get more focused on your retirement savings. If you’re on your own, find a financial professional you’re comfortable with and be ready to have an open discussion about your strategies. If you’re married, talk to your spouse regularly about financial issues and goals, and always go together to get advice.

If you feel as though you’re being talked down to or ignored, come with a list of questions and concerns and don’t leave until you’re satisfied that you got your answers.

Kim Franke-Folstad contributed to this article.

Investment advisory services offered through AE Wealth Management, LLC (AEWM). AEWM and Max Wealth and Insurance Solutions are not affiliated entities. Investing involves risk including the potential loss of principal.