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- Financial Planning and Retirement, from AARP
As a woman, you may have less money to retire on. You may have taken time — maybe years — out of your career to care for your children. Also, women often make less money than men. This makes it even harder to set aside savings. You may be retired and living on a fixed income. Or you may still be working, trying to save enough for retirement. Either way, it is important for you to know how to make the most of your money.
Today, women can expect to live longer than their spouses. A longer life means a longer retirement, which means you will need more money. You may have put a lot away in savings or a retirement plan. But are you making money with your money? Do you know how to invest and how you will manage your retirement distributions? Financial planning helps you manage your money so you can achieve your goals. Learning the basics of financial planning is something everyone should do. Even if you are informed, you might benefit from more expert tips. Visit mymoney.gov for more information about financial planning. Or talk with a professional financial planner. Financial planners can help you meet your financial goals by helping you manage your money. Be aware that you will be charged for the financial planner's services. If you decide to consult a financial planner, be sure to work with a fee-only planner. This type of financial planner works only for you and does not get commissions on your investments.
Tips on choosing a financial planner include:
- Know what you want – Determine your financial goals (How much would you like to have saved for your retirement?) and needs (How much income do you need each month?).
- Talk to others – Get referrals from people you trust, such as family members or friends.
- Interview more than one planner – Ask the planners about their education and experience. Ask how long their company has been in business, what the fee structure is, and how you will communicate with her or him.
- Get it in writing – Ask for a written advisory contract or engagement letter to document the nature and scope of services the planner will provide. This document also should include details on the fees for financial planning services.
Everyone should have an estate plan, which is a plan for what happens to your money and the things you own after you die. Having an estate plan can reduce the taxes that must be paid by your heirs. More importantly, it can spare your loved ones the pain of dealing with finances while also grieving your death. A good estate plan protects your property, ensures your wishes are carried out, and allows for the quick distribution of your assets.
First, you'll want to write down and give a value to everything you own. Here's a list to help get you started:
- Other real estate
- Savings (bank accounts, CDs, money market funds)
- Investments (stocks, bonds, mutual funds)
- 401(k), IRA, pension and other retirement accounts
- Life insurance policies and annuities
- Ownership interest in a business
- Motor vehicles (cars, boats, planes)
- Other personal property
After you've made your list of assets, you'll want to use that information to estimate the total value of your estate. Now it's time for some planning. Next, you will want to:
- Write a will
- Establish trusts
- List your beneficiaries for insurance policies and retirement accounts
Remember that estate planning is not a one-time event. Things can (and do!) change. Take another look at your estate plan if:
- The value of your assets changes a lot
- You marry, divorce, or remarry
- You move to a different state
- The executor of your will or the administrator of your trust dies or becomes unable to fulfill this duty, or your relationship with that person changes significantly
- One of your heirs dies or has a permanent change in health
- The laws affecting your estate change
Estate planning is complicated, and estate laws are always changing. Be sure to consult a lawyer who deals with family law or estate planning and perhaps a Certified Public Accountant (CPA) or estate planner for help.
Explore other publications and websites
Age Page: Getting Your Affairs in Order — This brochure discusses the steps you can take to prepare for the future. In addition, it includes information about important legal documents such as wills and trusts, advanced directives, power of attorney, and living wills.
Estate Planning FAQs (Copyright © American Bar Association) — This publication gives an overview of estate planning, including information on wills, revocable trusts, power of attorney, advanced directives, and the probate process.
Financial Information (Copyright © Caring Connections) — This site provides information on financial planning for end-of-life care. It discusses topics such as health care costs, living costs, funeral planning, and other expenses.
Connect with other organizations
Administration on Aging, HHS
American Association of Retired Persons (AARP)
Centers for Medicare and Medicaid Services, HHS
The AGS Foundation for Health in Aging
Content last updated August 12, 2010.
Resources last updated August 12, 2010.
A federal government website managed by the Office on Women's Health in the Office of the Assistant Secretary for Health at the U.S. Department of Health and Human Services.
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