Most of us want to spend our retirement somewhere warm and safe with good healthcare. We dream of sun-filled mornings, sipping our favorite cup of filtered coffee. We dream of friends and family visiting and having long dinners and enjoying good wine.
My question to you is: does your savings and investments support your retirement dream? I hope it does.
For the women in their late fifties and sixties who recently reached out to me to talk retirement, it didn’t. They all had concerns about not having enough money to retire. One of them even joked about being on the freedom 95 plan, which is funny, but also not funny, because it means that she would have to work until she was 95 (or until she died) in order to support herself.
Only thirty-eight percent (38%) of working women know how much money (compared to their current income) they would need in retirement. Example: if you currently earn $80,000 a year, will you need the same amount when you retire? Will you need fifty percent (50%)? Or will it be seventy-five (75%)?
Most women don’t know.
Not knowing how much you will need, coupled with the fact that women typically take more career breaks (compared to men) in order to care for their children, makes their retirement planning serious and urgent.
But here is the problem, at least from where I sit. When my clients come to me, they are nowhere close to investing in their retirement. Some are buried in debt, some are living paycheque to paycheque and the rest are just in oblivion. But the one thing they have in common is that they work for good money. Good money that should be managed properly, so that it can support them in their retirement years.
The good news is that after a few months of working with me, they are usually ready to start planning for their retirement.
A common trend I also see with some women, is that they don’t take the time to educate themselves on how to manage their money and they just take for granted what is told to them. The most common of this is women investing in locked-in funds when they have no savings, which often leads to them relying on credit to meet the difference that savings would have normally carried.
Example: You have no savings but you invest $500 a month in a locked-in mutual fund. Then, winter comes along and you need winter tires, but since you did not save any money to buy the winter tires, you charge it to your credit card. You repeat this type of credit card usage often enough, and you will end up in a mountain of consumer debt, at about 19% interest, which is most likely more than what you are getting in your investment.
Back to the women in their late fifties and sixties who reached out to me. Sadly, I don’t have a magic wand and therefore couldn’t materialized savings and investments where there were none. I was however, able to help them figure out their situation and better manage their money, but, they won’t be able to retire as early as they had wanted to.
If you are in your thirties, forties and early fifties, you still have time to realistically plan for your retirement. This plan starts with ensuring you have a balanced budget and not supplementing your income with credit. It also requires that you not be buried in consumer debt, and I can help with this.
If you want to fix your situation and get ready for your retirement, please reach out for a free consult.