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Retirement Planning: Do Women Need a Different Retirement Plan? September 19, 2008

Posted by retirementwithaplan in retirement.
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We have all watched the wild gyrations on Wall Street, the stepping in of the government to bail out troubled and once venerable financial institutions, and the ripple effects of such big sums of (taxpayer) money being shifted from one place to the next. What does it mean for our retirement plan. Better Yet, what does it mean if you are a woman and focused on your retirement plan?

I bumped into a blog post recently on the subject and decided to post a comment. Here is what i offered:

It is true that women will feel the loses in these kinds of tumultuous markets quicker than men will but several things can be done in the short-term to help alleviate any immediate issues. For one, look at the percentage of retirement benefits you might be drawing. Too often, folks who are thinking about retiring or who already are, tend to (or plan to) withdraw too much too soon. And if they feel as though the economic crisis will persist, they may even increases the withdrawal amount. Try and stay at 4%.

The candidates should be pushing for a true inflation index that is more volatile and more representative than the “core” index we currently use. Even temporarily dropping it would help innumerable seniors. Privatization (of Social Security)will not work for many women, unless they are under the age of forty.

Women who believe that they are in financial trouble should seek whatever available social services they can. Numerous states offer assistance with heating and food costs and women should not be too proud to take advantage of these offers.

If you are still employed and are seeing the retirement horizon move farther away with each breaking news story, you should instead be looking for something else you might like to work at when you retire. Perhaps a simple reallocation of among your funds will do the trick as well – not that bonds have done better.

If you are still working, you might even consider increasing your contribution to your retirement plan. Sounds counterintuitive but a true investor will see these down markets as buying opportunities and actually add to their portfolio instead of selling or contributing less.

The most important thing to do is maintain your health. These are tough financial times and surprisingly, the government has made some decent attempts to get things back in line. I don’t agree with the methods – it seems like they are learning to surf during a hurricane – and prevention should have come along a lot sooner, but they are doing their best to shore up a crumbling house.

This will pass and if you can weather the storm for the next several months to a year, the recovery should be quite nice.

Hope this helps some of you.

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