What Black Women Should Know About Preparing for Retirement Posted on November 17, 2019August 8, 2023 By Leigh Langston Even when you love what you do, there will come a day for all of us when work is just no longer possible. For many of us, the goal is to retire when we want to, not when we have to. To make the most out of life after you’re done working, consider the suggestions below. Start Early There are two big benefits to starting your retirement savings as early as possible. According to Capital Group, the first one is compound interest. If you save $10,000.00 at 5% interest, at the end of the year, you’d have $10,500.00. The next year, instead of only $500 in interest, you’d earn 5% on the total $10,500, so the interest gained would be $525.00. As the years go on, the interest and principal are combined, and the next return of interest is tied to that combined total, i.e., compounded. Secondly, you have recovery time. If you have money in stocks, they can pay back much more than 5%, which is appealing, but they may be volatile and risky. If there’s a severe market correction, you can lose money, but if you start early, you may have time to earn it back. Know Your Assets If you set up retirement accounts at work, you likely have access to mutual funds, index funds, bond funds and cash accounts. One of your goals needs to be finding out exactly what companies are included in these funds. For example, if you invest in a fund that’s a collection of retail stocks, you may see great numbers around the holiday season or a drop if sales are sluggish. Manley Capital Management reports that oil stocks can be volatile depending on the geopolitical climate, and while they can be a good investment, it could also suddenly crash. Try to balance your investments to protect your money for steady growth. It’s not a bad idea to have some money in more volatile accounts, but putting all your money into such accounts may not be a wise choice. Focus on Non-Monetary Investments The time you spend in retirement will be heavily impacted by your housing decisions, your health and at what date you choose to take Social Security. According to The Jenny Pincher, being a single woman can change what investment strategy will work best for you. If you’re single, try to invest in a home that will provide you with a safe shelter as you age. Avoid multi-story houses or try to find one with a full bedroom and bath on the main floor. Do as much as possible to stay in good health and try to take your Social Security as late as possible to get the maximum monthly payout. Whether you’re facing retirement alone or with a spouse, it’s also time to consider how you will spend your days. Look for volunteer opportunities or consider returning to school just for the fun of it. Retirement can be like a second chance at life, so make the most of it! Not sure where to start? It’s always a good idea to get help from an expert: Black Women Finance Experts That Can Help You Make More Money Like this:Like Loading... Related News how to prepare for retirementinvestmentsRetirementretirement fundssavingssocial security
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