Retirement Saving Tips for Women to Take Control and Build More Wealth in IRAs

The disparity in the amount of retirement savings women accumulate compared to men is vast according to experts. Some of this can be attributed to the fact that women as a whole tend to earn less than men who are employed in the same positions. But that should not prevent women from taking control of their financial futures so they can retire in comfort. In fact, there are a few retirement savings tips for women who want to build more wealth in their IRAs. And, some of these tips present the potential to accumulate retirement income at a faster pace than typical retirement savings methods.

First, it’s important for women to understand that that if they make moves now toRetirement Saving Tips for Women to Take Control and Build More Wealth in IRAs improve their savings and investing strategies in their retirement plans—their potential for living their golden years the way they envision is possible. And, that is the result we want women to achieve, because according to an article published in USA Today, women:

  • save an average of 43 percent less funds for retirement than men
  • are 80 percent more likely to live in poverty at age 65 and older than men of that age
  • need about $150K to cover health care costs when they retire

These stats should be acknowledged because without realizing that you may have a potential problem you might remain unaware of solutions that can help you! But, if you are a woman who is, in fact, a bit behind in saving sufficient income in your IRA, don’t dwell upon the statistics. Instead, turn your focus on these retirement saving tips for women like you who want to build more wealth in their IRAs. Because, you can take control of your retirement planning and prevent yourself from being a statistic.

Retirement Saving Tips for Women (but these work for everyone, too!)

Yes, these strategies work for anyone who plans to retire one day. But if you’re a woman looking to catch up to the men and build retirement wealth—then read on to find out how you can!

Open a self-directed IRA.

Self-directed IRAs have the potential to help you earn retirement income at a faster pace than a typical retirement plan. How? Because these accounts can use alternative investments (like real estate and private equity) instead of just stocks, bonds, and mutual funds. As the account owner, you call the shots and choose the assets for your plan. Even better, you can invest in a myriad of things you personally know and understand!

The best aspect of a self-directed IRA is that you are in control of how your retirement funds are invested. But this doesn’t mean you have go it all alone. You can still draw on professionals to help you make sound investing decisions. And the account administrator, such as Advanta IRA, maintains all of the administrative details—so you can concentrate on identifying and investing in alternative assets to help build that wealth in the plan.

Own a small business? Check out SEP IRAs and individual 401(k)s.

A self-directed 401(k) is a great plan for the self-employed and businesses who don’t have any other full-time employees besides themselves, a partner, and their spouses. Top features of this plan include higher contribution limits than traditional or Roth IRAs and the ability to borrow personally from your plan. The employer profit-sharing match is a tax-deferred contribution, which is also a deduction for the business! Self-directed 401(k)s also have a Roth option that can be beneficial depending on your needs.

Simplified employee pension plans (SEP IRAs) are tailored for businesses with 25 or less employees. These plans are less expensive and easier to manage than 401(k)s. Sole proprietors, independent contractors, and self-employed individuals who want to capitalize on higher, tax-deductible contributions favor these plans. A bonus is that the contributions can vary from year to year—and you don’t have to make annual contributions. You can also self-direct SEP IRAs to take advantage of the income-building potential of investing in alternative assets.

Open a health savings account.

Ok, we know setting aside additional funds for saving is sometimes challenging, but hear us out. Because health savings accounts (HSAs) can significantly reduce the amount of retirement income you have to spend on health care when you’re older. Of course, you can use these savings to pay for qualified health care costs before retirement. But, these tax-sheltered plans earn income year after year, and unused funds remain in the account earning interest and savings over time. In fact, you can save quite a bit in an HSA by the time you retire. Once you reach the age of 65, you can take penalty-free withdrawals for any purpose—not just health care. And, you guessed it, HSAs can be self-directed, too!

Self-Directed Plans Can Invest with Limited Funds.

If you’re worried about not having enough capital in the account to invest, you have options here, too. You can partner your IRA funds with your own funds or with another IRA or person to invest. You can also choose alternative assets that cost less to acquire such as tax liens and deeds. Your IRA can even extend small, private loans to individuals and earn income on the interest as the loan is repaid. There are many different ways you can double-down on the income earning potential of the typical retirement plan when you choose to self-direct.

We hope these retirement saving tips for women have helped you understand how you can take an active role in building wealth for retirement. But, regardless of your gender, if you are seeking ways to maximize the earnings in your retirement plan, contact Advanta IRA today. We are happy to discuss how self-direction works for everyone to help grow the income in your retirement portfolio.