beneficiary. Retired women should also look into a durable power of attorney and a medical power of attorney, which will allow someone to make decisions on their behalf. In addition, if a woman is widowed and has an estate worth at least $1 million, she should ensure that she has enough to pay the federal estate tax that would have been deferred until her death.
Experts urge women to seek the counsel of attorneys, as well as financial planners, who can help grow their estate’s value and protect it from taxes and inflation. Many women are less likely to seek advice, often because they do not think they have accumulated enough wealth to make it worthwhile. “Never think that your portfolio is too small to seek financial advice from a professional,” says Kathleen. “You have to be careful with these assets that you’ve spent a lifetime accumulating.”
WHAT YOU SHOULD KNOW
1. It’s essential to start preparing for retirement the moment you begin working. You don’t want to be caught 15 years after retirement with little or no nest egg. Consult a financial advisor to figure out how much you’ll need to retire comfortably, especially since Social Security will only replace about 40% of your average earnings.
2. Restructure your portfolio so that it allows you to replace earned income and provides steady growth. Focus on safer investments such as low-risk bonds with 40% invested in stocks to fight inflation over the long term.
3. Women over age 50 can contribute catch-up amounts of an additional $2,000 for a 401(k) and an additional $500 may be contributed to an IRA for 2003. Another way to increase income is to reduce expenses so that you can retire in style.
4. Estate planning is key for retirees. Consider setting up a durable power of attorney and a medical power of attorney to allow someone to make decisions on your behalf.