Published by Taylor Financial Group (for women)
This is the last week, Week 4, of our weekly series on “How to Avoid 4 of Retirement’s Biggest Pitfalls.” In Week 1, we emphasized how every woman needs to calculate her retirement savings needs, or she risks not saving enough money and running out of money in retirement. In Week 2, we reminded you that women need to start saving their money sooner rather than later for retirement and highlighted the benefit of saving and investing early. In Week 3, we explained the positive impact participating in a 401(k) or similar retirement plan can have on your retirement savings. If you missed any of those posts, we highly encourage you to click on the links above to learn more about the tips and tricks to avoiding retirement’s biggest pitfalls. In Week 4, we focus on having a backup plan.
A shockingly low percentage of women (19%) possess a “backup plan” in case they are forced into retirement sooner than expected. As we know, even the best laid plans can go awry, and that is why you need a backup plan. Women can be forced into retirement due to anything from job loss to health issues to family obligations and more. 1
Think right now about what you would do if you were to retire just one year earlier than you have currently planned. Do you have a reasonable and reliable solution? You need a backup plan to make sure that an unexpected event will not derail or prevent your comfortable retirement. Within this backup plan, you should include access to cash and an open line of credit as a “just in case” assurance against worst-case scenarios. This rainy-day fund has helped many of our clients during times of need when they require access to their money as quickly as possible, whether it be for emergency medical expenses or damages to property!
At Taylor Financial Group, we provide our clients with backup plans and work through various “disaster scenarios” using our WeathMatch software to make sure unexpected events will not derail our clients’ retirements. If you have any questions or concerns about your retirement plan, feel free to reach out to us at Taylor Financial Group so we can help you create a more positive financial future.
Sources:
- 10 Alarming Facts about Women and Retirement Risks, ThinkAdvisor, 3/9/17
Distributions from traditional employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty.
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