0:00:00 - Speaker 1
Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Securities offered through registered representatives of Cambridge Investment Research Inc. A broker-dealer member, FINRA, SIPC Advisory Services through Cambridge Investment Research Advisors Inc. A registered investment advisor Cambridge and Greenway Wealth Advisory are not affiliated.

0:00:20 - Speaker 2
It's time to dive into some insider secrets of investing and retirement planning.

0:00:24 - Speaker 1
To make your retirement as smart and as elegant as possible.

0:00:28 - Speaker 2
This is Money Chic with Sherry Rash. Hey everybody, welcome into another edition of Money Chic Women and Retirement, with Sherry Rash Joining me once again to talk investing, finance and retirement. As we usually do, we're going to talk about women and men Should they save differently for retirement how does that look? And some points that Sherry is going to make on that in just a minute. And, as always, if you've got questions, you need some help. Reach out to her. I stopped by her website at GreenwayWealthAdvisorycom. Sherry, welcome to January. How are you?

0:01:01 - Speaker 3
I'm great. Happy New Year.

0:01:03 - Speaker 2
Yeah, exactly, happy New Year, Hope. We were just chatting before we got going. We were both kind of boring, I guess, for New Years, but that's all right, I didn't mind that right.

0:01:12 - Speaker 3
I enjoy going to bed and waking up in the New Year and just being chill about it.

0:01:17 - Speaker 2
Yeah, exactly. So we were just kind of chatting about that a little bit, but hopefully everybody had a good holiday and enjoyed some downtime and things of that nature. But we're back into the New Year and new things going on, so I know we want to get into this article and we're going to post a link to this as well. So this was from a CNBC article by Trina Paul. I think I have that right and, like I said, we'll put a link in the show notes. But basically the synopsis is just pointing out data that shows some differences in how women and men earn as well as save and so on and so forth for retirement. So I know you've got some points you wanted to make on this, so I'll let you kind of jump right in.

0:01:52 - Speaker 3
Yeah, I really enjoyed this article. I feel like it's the drum I beat every single day as far as how women and men need to look at retirement differently, the way they save for retirement differently, because we all have different challenges when it comes to retirement and we're all going to get there at some point as far as retiring goes. But our journey to get to retirement will look very different and, depending on what life throws at you during your working years, you need to be able to prepare for it, and I think this article did a really good job of explaining some of the risks women have when it comes to retirement and saving for retirement. And then I just want to add on some ideas on what you can do about those risks.

0:02:38 - Speaker 2
Well, you know, through the years it's definitely been women have been a more underserved, I guess, demographic when you're talking about retirement, because traditionally it's just been a male dominated field, but also a lot of times in relationships it seems as though one person who tends to gravitate towards kind of doing that, and it's typically been male, but it's definitely changed a lot over the last several years and the gender wage gap is narrowing and I think the retirement gap is narrowing, which is a good thing.

0:03:06 - Speaker 3
It is a good thing. I mean, when you think about the financial services industry, only 16% of financial advisors are women. So right there, we are in a very small minority. So if a woman wants to speak with another woman, only 16 out of 100 advisors are going to be like them, just gender wise. So then, when you focus on the risks that you can face, men aren't necessarily thinking about the risks women face in retirement, because they're male and they think about themselves, or paying everyone with a similar brush or, like you said, traditional couples.

0:03:44 - Speaker 2
Yeah, that kind of tried and true method right.

0:03:47 - Speaker 3
Exactly.

0:03:47 - Speaker 2
Yeah, I know I get what you're saying. There's definitely that tried and true kind of thing where you just kind of get into the habit, you do what you do, but it is getting better. And so with the I guess, with the wage gap changing, there's also the less time a lot of times working right If you step away to have kids. So what are some of the things that we can do to kind of start to shore that up?

0:04:05 - Speaker 3
So the risks that women generally face when it comes to retirement, whether you're single or married or what have you one, is the wage gap that is becoming smaller or not as much of an issue today, but 15, 20 years ago, when women were working, that was a very real issue. So getting paid less for similar work, or just earning less in general, was a very real issue. So when you earn less, odds are you're also saving less. So when a woman enters retirement she by most accounts has less than a male counterpart. So the wage gap is a real risk when it comes to retirement, but also less time in the workforce, and this could be for many different reasons. The most obvious one is having children. So when a woman has children she's obviously taking a maternity leave at a minimum, but then she may exit the workforce for a few years to raise the children. So it's very realistic that the average woman could spend six, seven, eight years out of the workforce. So that's that many years not contributing to social security.

0:05:22 - Speaker 2
Not saving.

0:05:23 - Speaker 3
Yeah, not saving for retirement, so we need to account for that, but then also just caring for family in general, being a caregiver, so caring for an aging parent. That responsibility most of the time three out of four times falls on the woman or the daughter in family dynamics. So that's another reason why women may exit the workforce or potentially take a step back, which really just has a domino effect. Your social security then is potentially less and you have less saved in a retirement account.

0:05:58 - Speaker 2
Yeah, and that's a great point because it does kind of snowball, I suppose, if you will right. So because if you think about the social security formula, right, it's based on the highest 35 earning years that you have and so if you've removed from there for a little while, that could alter what years it's looking at, as well as just the gender gap back, you know, the wage gap put back in there. So it definitely can kind of snowball up a little bit. So what are some things we can do, what are some steps that we can maybe start to look at or take?

And it does seem weird to me too, right, because traditionally we die first, we pass away first. So it does seem really goofy that it has been underserved because often, you know, women are left behind, the spouse is left behind in that situation or whatever the case is, and you want to have them, like, up to speed and they want to know what's going on and they want to be prepared and feel confident. So it does seem really strange that we've kind of gone into this weird. It's almost backwards.

0:06:50 - Speaker 3
Correct. Another risk is that women retire earlier. So if you're looking at a couple, usually common for one partner or spouse to be a few years younger than their spouse, and it's common that most couples retire within the same time period. So it might not be exactly at the same time, but it's within a year or two of each other. So automatically the younger spouse is then retiring younger than her partner, so that also is less time in the workforce as well. So there's so many ways that women can spend less time in the workforce and again it's like you said, it's a snowball. It's then less social security. You may not even have those 35 working years that you use to calculate your social security. So what we can do for this is one frontload your retirement savings. So when you're in your 20s and 30s or you haven't yet started a family, maybe not yet married and some of you listening they go well, it's too late for me, but at least share the knowledge.

0:08:01 - Speaker 2
Right. Well, it's never too late, right. Never say never.

0:08:03 - Speaker 3
But when you're in your 20s and 30s, frontload your retirement. So be very aggressive when it comes to retirement savings, which when you're in your late 20s that may seem crazy to save for retirement aggressively because you just started your career. But that's 30 years of market growth that you can appreciate and have when you're closer. So before you have all the family responsibilities, the higher expenses, frontload your retirement and save as much as you can.

0:08:37 - Speaker 2
That's a good point. I mean, it definitely would require more discipline, right, a little bit of planning, a little bit of strategy, but it could be a good way to kind of quote unquote hedge for those years that you do this, especially if you feel like I know I'm going to want to step away to raise kids.

0:08:51 - Speaker 3
right, that could certainly be a great way to do that.

0:08:53 - Speaker 2
So that's a great point. What?

0:08:53 - Speaker 3
else Exactly On. That idea too is for those years that you do step away to raise children or care for an aging family member, utilize a spousal IRA. So the working spouse can contribute to an IRA on behalf of the non-working spouse, so the same IRA rules apply. So right now, $6,000 if you're under 50, that you can contribute to an IRA. So then that way the working, the non-working spouse can still have some retirement savings for them during those years that they're outside of the workforce.

0:09:31 - Speaker 2
Okay, all right, you know, and we were talking about some different ways and I guess we were kind of circling around different areas, but I was thinking about the social security aspect as well. I mean, there are some things in place that do kind of help, right. So if you're married and your husband passes away, you know you typically get the higher of the two. So if he was the higher earner through the years, they do kind of have a couple of things built in to help. But why not take the you know the onus on ourselves to, you know, kind of improve our own numbers if we can?

0:10:00 - Speaker 3
Really, the way you can improve your own numbers is to delay social security. If you're retiring before your full retirement age, try to have a plan set up to start social security when you're at least full retirement age. That's the best way that you can help yourself, because if you start social security prior to your full retirement age, you're not receiving 100% of your benefits. So at least wait until full retirement age or delay longer. Each year you delay after full retirement age, you get an 8% increase which is a nice increase that you can receive?

0:10:39 - Speaker 2
Yeah, it's not bad. So 67 to 70, you're talking what? 24% right, yeah, so yeah, not bad, so yeah. And if you're whether you're single or married, sherry, so like, even if you're married, having a good strategy together about social security can go a long way. Maybe it does make more sense for one person to delay, and in this case, maybe it is for the wife to do that or whatever. So it's all part of kind of putting together and looking at the numbers and running some different scenarios and kind of stress testing this out so you can see you know what's the best overall strategy, whether you're single or married.

0:11:13 - Speaker 3
Exactly and you can. There are tools out there and advisor can help you with running the numbers and coming up with a strategy to get the most out of social security that you can, but also make sure social security fits your vision of your retirement.

0:11:28 - Speaker 2
Yeah, definitely Anything else. What other ideas kind of popped to mind?

0:11:32 - Speaker 3
The last thing I can think of that would be a benefit is to take advantage of Roth IRAs. Okay, roth IRAs, as a reminder, are funded with after tax dollars, so you're paying the taxes now, but the benefit of it is it grows tax deferred and then Roth IRA dollars are withdrawn tax-free. So if you have less money saved towards retirement, I'd much rather see less money saved in a Roth IRA than a traditional IRA, because your traditional IRA you're going to owe 25% of it or so to the government. So at least with your Roth IRA you know that the dollars that you have saved, you're not paying taxes on top of it. So definitely save as much as you can in the Roth. Going back to the front-loading retirement in your 20s and 30s, take advantage of the Roth for as long as you can.

0:12:24 - Speaker 2
Yeah, definitely, because there's so many options out there now too. So, as we said, to kind of kick things off, all of the stuff is narrowing, which is good, and it's definitely something that we'll hopefully continue to see more of in the industry in general, which is partly what you do, right, which is why you do what you do, and, of course, one of the reasons why we do the podcast is to share some of that information, to kind of hopefully help and, as you said earlier, you know, share the wealth with other folks who might not know some of this stuff, especially when you're talking about for women.

0:12:52 - Speaker 3
Exactly.

0:12:53 - Speaker 2
Yeah, you know, when you go through and you sit down with somebody, with a lady, to talk about this, what are some of the things that you kind of highlight? Is that where you kind of start? Do you kind of look at this from that trajectory or do you kind of look at the holistic thing across the board?

0:13:09 - Speaker 3
When I'm sitting down with someone, I'm looking at first the types of dollars they have saved, because when you're saving for retirement, it's important to diversify the types of dollars that you do have. So, tax now accounts, so that's just traditionally after tax dollars, tax later accounts, which are traditional IRAs, 401ks, 403bs, but then Roth IRAs tax never accounts and that's money that you're not paying taxes on in retirement. So trying to diversify the types of dollars that they have and hopefully I'm sitting down with folks when they're not retiring tomorrow so we can implement some positive changes today that they can benefit from five, 10 years from now when they actually are retiring, got you?

0:14:01 - Speaker 2
Okay. So bottom line is is definitely get started as soon as you can have these conversations, because whatever your life plans are, you know, as Sherry mentioned earlier, it throws us curveballs right. Murphy's law kicks in. Something happens. You never know what's going to be the case. And while it may be harder to think about, you know, front-loading retirement earlier on, it could certainly have big benefits down the way. So but there are other options if you didn't. So just make sure that you're reaching out to a qualified professional, a financial advisor and someone who just does this day in and day out, as Sherry pointed out. So, and you can find out more information from her, you can talk with her, you can schedule some time, lots of stuff you can do by stopping by the website. She's got the unlock, your money blocks and lots of different things on the website. You can check out very cool stuff. So go to GreenwayWealthAdvisorycom. That's GreenwayWealthAdvisorycom. And, of course, if you have questions and you need some help, definitely reach out by calling 703-255-2808. That's 703-255-2808. Of course, you can find all that information on the website.

Don't forget to subscribe to the podcast on Apple or Google or Spotify or whatever platform you like to use. Often these are already preloaded on your phone. If you're an Apple user, for example, apple Podcasts comes pre-installed. Just open up the app and type in Money Chic Women in Retirement and you should be able to find the podcast that way. So, sherry, thanks for hanging out and welcome to the new year and I'm glad you had a good holiday and I look forward to talking to you in a couple of weeks. Sounds good. We'll see you next time here. Folks on the podcast, with Sherry Rash, financial Advisor and Money Coach at Greenway Wealth Advisory, serving you here on the podcast and on the show Money Chic Women and Retirement, we'll catch you next time.

0:15:44 - Speaker 1
Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Securities offered through registered representatives of Cambridge Investment Research Inc. A broker-dealer member, finra SIPC advisory services through Cambridge Investment Research Advisors Inc. A registered investment advisor Cambridge and Greenway Wealth Advisory are not affiliated.