Investment Tips for Women
It’s no secret: With longer life spans and lower earnings on average, women often face unique financial challenges. What follows are a few tips women may want to consider as they create the financial cushion they need.
Contribute to your employer-sponsored retirement plan. Contribute as much as you can possibly afford to your 401(k), 403(b), or 457(b) retirement plan at work and increase your contributions each time your salary goes up. Your retirement plan provides you with tax-deferred earnings and a variety of investment options.
Consider purchasing life or long-term care insurance. With millions of Baby Boomers joining the ranks of the elderly each year, the costs of long-term care are expected to skyrocket. And with many women acting as caretakers, the financial burden often can fall on their shoulders. Shop around for a company with favorable rates, but keep in mind that the financial strength of the insurer matters, too. You want the company to still be there decades later should you need the coverage.
Maximize your IRA contribution. Even if you have a 401(k) or other employer-sponsored retirement plan, you may be eligible to contribute to a traditional or Roth IRA. (However, your ability to fund a Roth IRA depends on your income.) If your income qualifies, the contribution limit to either a Roth IRA or Traditional IRA for 2017 is $5,500, or $6,500 if you’re 50 or older.
Invest for growth. Studies have shown that, in many ways, women are better investors than men. Women tend to do less buying and selling, which cuts down on fees and expenses, and women also are more likely to look at the “big picture,” which translates into better long-term investment decisions. However, women also seem to invest more conservatively than men, and conservative investments typically do not produce the growth achieved by more aggressive vehicles. Of course, you need to stay within your individual risk tolerance when you invest, but be aware that investing too cautiously could slow your progress toward your ultimate goals.
These suggestions can greatly help in your pursuit of financial security. So invest early, often, and wisely—you’ll be glad you did!
This article is provided by RBC Wealth Management on behalf of Gary Kiemele, a Financial Advisor at RBC Wealth Management, and may not be exclusive to this publication. The information included in this article is not intended to be used as the primary basis for making investment decisions. RBC Wealth Management does not endorse this organization or publication. Consult your investment professional for additional information and guidance.
RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC.