Tag: retirement

When it comes to retirement—and to passing on whatever wealth you’ve accumulated to a spouse or the next generation—you may think you’ve thought of everything. However, despite your careful planning it could be that Uncle Sam will be handing you a hefty tax bill while you’re living—or your beneficiaries one when you die.

Even people who have been great about saving for retirement don’t always realize the tax implications of what they’ve done. They may have created a significant tax problem for themselves, and they could be leaving behind a tax time bomb for their beneficiaries.

The trends are clear: as women age odds are they will be living alone, largely because of either divorce or widowhood.

What may be less clear for many of them is whether they are prepared for that life alone—both emotionally and financially. Although both men and women could live three or four decades in retirement, it’s more likely for women because they have longer life expectancies. A caveat is they often have less in savings, and smaller or no pensions so their longevity can work for them and against them.

It’s hard to believe that only some 50-odd years ago, a woman’s financial identity was tied explicitly to someone else—her husband, her father or some other male in her life. In the modern age, women make up nearly half of the American workforce. In addition, the average age of marriage is now in the late 20s—and unfortunately, the divorce rate remains high.

In other words, women are in financial control of their destiny. Even if they’re married, most women are still financial earners and maintain their own financial identity. With that in mind, here are critical financial items that every woman should know regardless of their stage of life or marital status.

Real Estate Investment Trusts (REITS) play an important role in a well-diversified portfolio. Real estate remains one of the best ways to hedge inflation. Whether you believe the inflation we’ve seen this year is transitory or here to stay, having 5% to 15% of your investment portfolio in real estate makes sense to protect your retirement nest egg. Investing in REITS is one the least expensive and most liquid ways to gain exposure to this asset class.

So you live paycheck to paycheck with little left for anything but the necessities? Welcome to the real world. For many married couples, counting the days to payday is a way of life. The notion of saving for a rainy day seems far-fetched. The good news is that’s probably more perception than reality.

If couples plan and stick to a budget, in most cases they can live comfortably and have funds on hand for uncertain times when income is reduced or interrupted.

Throughout my career I have, many times, found myself in the middle of husbands and wives who couldn't agree on whether to sell their family home for something smaller—an apartment, condo, or cottage. They also couldn't agree to settle in the city, near grandchildren or somewhere else. I have learned to embrace this role of middleman, helping couples reconcile what they both want so everyone wins.

I tell couples they can have it all. All they have to do is figure out what having it all means to them and what compromises they are willing to make in the wishes that aren't really important.

Mary and Pete saved every penny for retirement. They never went on vacations, they rarely went out to eat, and they lived a frugal lifestyle secure in the knowledge that when they retired, they would be able to live comfortably.

In short, they worried so much about retirement that they forgot to experience all that life has to offer.