Investing Rules for Women

These tips will make your money grow


Kimberlea Rodney, 32

Subject: Kimberlea Rodney

(Photo by Lonnie C. Major)

It’s admirable that Kimberlea Rodney began investing for retirement at the ripe old age of 22. Fortunately, when she started her job with what was then the New York City Board of Education, all employees were required to invest at least 3% of their income in the employer-sponsored retirement account. After 10 years on the job, Rodney has $24,000 between a tax-sheltered annuity and her Teacher’s Retirement System accounts.

“I stopped contributing for a few years when I was in forbearance with my student loans, but that was one of the worst things I could have done,” says Rodney, a middle school teacher. She also borrowed $9,000 from the account a few years ago to use as her down payment on a co-op in Brooklyn, New York.

Though Rodney needed the cash, she broke one of the cardinal rules of investing. “Once you start putting money in that retirement purse, do not take it out,” declares Deborah Owens, co-author with Brenda Lane Richardson of A Purse of Your Own: An Easy Guide to Financial Security (Fireside; $15). Owens says borrowing from your retirement account should be your last option. She advises taking out a loan or working an extra job instead. “If you are going into that purse, you are living beyond your means,” she warns. Fortunately for Rodney, she’s planning to work another 30 years, so she has time to recoup her lost earnings.

There are a variety of retirement investment vehicles available of which women can take advantage, whether they’re employed full time, running part-time businesses, or not working. “The days of working for the same employer for many years are gone, especially for women,” says Owens. “Even if you have a part-time job selling Mary Kay or Pampered Chef or any of those side businesses, you can contribute to an [Individual Retirement Account] or [simplified employee pension] IRA.” Last year, the SEP IRA contribution limit was $49,000; in 2008, it was $46,000. With the Spousal IRA, nonworking wives can contribute a lesser amount, usually up to $5,000.

Also, if you’re faced with the choice of paying your children’s college education or saving for retirement, choose retirement. You’ve heard it before but it bears repeating: Your children can get a scholarship, but there are no scholarships for retirees. “With divorce rates being what they are, and with most women outliving most men, women must invest for the long term,” says Brackens.

—Sakina P. Spruell


–Figure out how much money you need for retirement. A single retirement or Social Security account may not be enough to fully support you during your nonworking years, so work with an adviser to determine how much money you’ll need, and by when. Calculators like those offered at ( can help. Just click on the tab labeled “Retirement” and go to “Retirement Calculators.”

–Contribute set amounts to retirement accounts to achieve your goals. If your employer has a 401(k) or 403(b), contribute as soon as you’re eligible, and at least up to the amount your employer matches. If you’re self-employed, contribute to a SEP IRA; if you’re a nonworking wife, you can contribute to a Spousal IRA.

–Consider supplementing your retirement income with a rental property or a small business.

This article originally appeared in the March 2010 issue of Black Enterprise magazine.


A Woman’s Guide to Money Management

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  • Thank you for such an inspirational article. I especially appreciate the personal stories and resources including the book “Buy Low, Rent Smart, Sell High: Real Estate Investing for the Long Run”. When I first started investing, I discovered that local community colleges and county agencies also offered affordable workshops and weekend courses on investing.

  • This article is so true! As a CERTIFIED FINANCIAL PLANNER(tm) professional I’m always encouraging young clients to save. My experience has been that most women are willing to save and get their finances in order. Starting young is so important. The difference in starting at age 25 versus age 35 is tremendous. I actually wrote a book that discusses this. It gives an example of people starting at different ages (20, 30, 40) and the huge difference ten years or tweny years makes with compound interest. My book is titled, “Money Management: Easy as 1, 2, 3.” It has been receiving excellent reviews. The website to order my book is

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  • hilda nwanekwu

    The article is an eye opener and a confirmation to some issues that have been topmost on my mind lately. I’m trying to re-grow my finances and invest for my retirement. As a social worker i tend to put a lot into charity and helping the less privilege. I’m into the fashion business as well as manage an NGO whose cause is to empower younger women. This, most times, along with the overhead of the organisation is solely borne by me. Grants and aides are very hard to come by. However, i think it’s high time i told myself the truth and start putting some money aside no matter how small it might be.

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