Women and Retirement: Put Some ‘Life’ in the Mix

January 5, 2010
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Ernest Dorado of La Verne

Ernest Dorado of La Verne

Planning for retirement is a complex undertaking for all of us, but for women, it’s especially challenging. 

 One reason is that women live longer than men, so they have more years of retirement to prepare for.  Another is that they spend more of their active years out of the workforce — in many cases, raising children or caring for aging relatives — which gives them less opportunity to build up retirement savings and private pensions.

As a result, women wind up more dependent than men on Social Security to pay for retirement, and Social Security often isn’t enough. On average, it pays just 40% of what a wage earner made in her working years.(1) But as a woman, you can improve your prospects for a secure retirement through smart long-term planning:

• Start saving on a regular basis. Even $20 a week can add up to a decent nest egg, especially if you start young.

• Take retirement into account when choosing a job. Ask potential employers if they offer a retirement plan and/or pension plan. Find out how they work. Look for employers that match at least part of your contribution to a retirement account.

• Work as long as you can. The longer you earn income, the more time you have to amass savings. The older you are when you stop working, the fewer years of retirement you’ll need to budget for. Delaying the start of Social Security benefits up to age 70 will result in a larger monthly check, too.

• Purchase a life insurance policy. Permanent life insurance provides guaranteed death benefit protection for your loved ones in the event of your death. Additionally, it offers valuable “living” benefits and tax advantages. For example, as a policyholder, you can access accumulated cash value through loans and withdrawals (2) to supplement your retirement income. Plus, these funds can also be used for college expenses, as collateral for a small business loan, or any other happily anticipated or unexpected event.

Using life insurance is a little-known option that can be a big help for women down the road.

This educational third-party article is being provided as a courtesy by Ernest G. Dorado. For additional information on the information or topic(s) discussed, please contact Ernest G. Dorado at 909.593.8923 or www.ernestdorado.com.

2Loans against your policy accrue interest and decrease the death benefit and cash value by the
amount of the outstanding loan and interest; withdrawals reduce the available death benefit.

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