How Successful Women Save
The U.S. Harris Poll research asked more than 500 women age 55 and older with personal investable assets of $1 million or more what they had done to attain their goals.
Many of their strategies mirrored those used by men to achieve financial freedom. However, women face unique challenges in retirement planning. They often live longer, earn less, and are more likely to deplete savings to care for a spouse or relative.
Start smart, start now
Let’s begin with some basic steps of saving. After all, you need to be able to put aside some money before you can think about investing it.
That means, getting going as soon as you can. It’s never too early — or too late — to start. The sooner you start saving, the more time your money has to grow. And thanks to the magic of compounding interest that can make a big difference in the total wealth you can accumulate. As Einstein said, "Compound interest is the eighth wonder of the world. He who understands it earns it... he who doesn't... pays it."
Remember The Rule of 72 — an estimate of how long it takes for an investment to double. Divide 72 by the annual rate of return. For example, at a 7% return, it takes about 10 years (72 ÷ 7 = 10.3) for your money to double.
Ditch the debt
At the same time, try to avoid high-interest debt, such as credit card debt. The more money you spend on paying down debt, the less you’ll have to invest. This difference is especially significant in the long run.
Make saving a habit
And this is the key point — you're in it for the long haul. It's a marathon, not a sprint, so consistency is key. For inspiration, consider that this strategy was crucial for women who have accumulated more than $2.5 million in investable assets, according to research.
Where to invest
Once you have money set aside, the next decision is where to put it. There are a lot of different investment and savings options out there. Which ones are right for you?
What’s your risk tolerance?
Here's a simple guideline: If you can invest in a portfolio and feel comfortable, it's likely within your risk tolerance. However, if you find yourself worrying about it frequently or losing sleep, you may need to reduce your risk exposure. You can also take Athene’s online quiz.
Don’t put all your eggs in one basket
We’ve all heard this before on why diversification is important—spread your investments across different areas. A risk-managed portfolio with various asset classes and risk levels can help you navigate market downturns more smoothly. If done correctly, losses in one investment can be balanced by gains in others. Some insurance products, like indexed annuities, can also help manage risk by providing built-in diversification and protection from market downturns.
Charting your course
What are your dreams and goals? Do you want to travel the world, help the grandkids through college, or just kick back and be comfortable? Whatever your plans, having a roadmap is essential to reaching them.
Empower yourself with knowledge
Mastering money is a process—even the experts continually learn and educate themselves. That’s why learning about investment options and market trends is beneficial. It doesn’t have to be a full-time job; learning goes a long way.
Partner with a professional
Finally, many women find that working with a financial professional is immensely helpful. According to the survey, over 75 percent of women work with one, and 50 percent attribute their success to the advice they received.
No matter where you are in your retirement planning process, these strategies can provide a boost. By following a disciplined plan, focusing on your goals, and collaborating with a financial professional, you can achieve the results you need to enjoy a fulfilling retirement designed by you. It’s never too late to start. Let’s connect — I would love to hear where you are on your journey.
The information provided is for informational purposes only and should not be considered financial, investment, or legal advice.