Yes, Baby Boomers are bringing “girl power” to a whole new level. The “Women of Wealth” on the BCT Wealth Advisors team nod their collective approval!
As the Wall Street Journal recently reported, women over the age of 60 control $8 trillion in liquid assets and lead the biggest wealth transfer in modern history. In the spirit of Women’s History Month, we urge women of all ages (and tax brackets) to take hold of their finances now.
Whether you’re a Boomer, a Zoomer, or somewhere in between, you must be in the driver’s seat of your financial future. Women are caregivers, providers, and point people for a multitude of priorities, but are typically less confident when it comes to wealth planning. If your financial future gives you anxiety, answering these questions will help you gain confidence and take control:
Is your portfolio diversified?
Diversifying your investment portfolio is a win-win for women of all ages. Why? Maintaining a range of investments minimizes risk, positions investments for long-term gains, and prepares you for a comfortable retirement. When your investments span different financial products, industries, and categories, a weaker return on one investment can be offset by the strong return of another. Balance–in life, in health, and in finance–-is a good thing, as it makes you stronger in the long run.
Should you be tariff-ied?
The news can be scary. War. Disease. Political Unrest. Tariffs. Inflation. Oh my! The secret to achieving and maintaining financial independence is to stay focused on your long-term goals. Reacting to market volatility results in missing out on growth. Stay calm and carry on. But we don’t need to tell you this. Numerous studies show that women outperform men in investing.
Are your IRA contributions tax deductible?
There are different tax guidelines for traditional IRAs and Roth IRAs based on your age, so knowing the particulars benefits your portfolio. The short-term benefit of traditional IRA is that you receive a deduction for your contributions. If you have a traditional IRA AND you’re not enrolled in an employer-sponsored plan, single people and married couples filing jointly can deduct $7,000 or $8,000 (if 50 or older).
With a Roth IRA, your contributions aren’t tax deductible, but withdrawals are typically tax-free, if you meet certain requirements. Roth IRAs are not subject to required minimum distributions. This benefits you (and your beneficiaries) later in life.
The same concept applies to 401(K) plans, traditional contributions are deductible, Roth contributions are not.
Are you maxing out your Health Savings Account (HSA)?
The New York Times estimates that women in the United States have a life expectancy of about 80, whereas men live to about 75. So, taking care of yourself–and making smart financial decisions about your health–is paramount. One way to accomplish this is by opening a Health Savings Account (HSA) and maxing it out. HSAs operate as pre-tax savings accounts where you deposit money to cover the anticipated costs of copays, coinsurance, prescriptions and more. HSA contributions roll over from year-to-year, so you can invest them or keep them in a savings account. As long as you use your HSA to pay qualified medical expenses, your contributions and distributions remain tax free.
Have you designated beneficiaries in your retirement accounts, annuities, and life insurance policies?
Designating the beneficiaries–the individuals or charities who will inherit your assets after you pass away–is a powerful way to control your legacy. When you choose beneficiaries, you name them in writing, making it clear as to where each asset will go. This ensures that your earnings and your social impact are stewarded by those you trust, and don’t go into probate after you pass.
Have you (or your spouse) updated the beneficiaries on your accounts?
This is a judgment free zone: new loves, births, divorces, and deaths happen over the course of a lifetime. If you or your spouse’s circumstances have changed, you should update the beneficiaries on your retirement accounts as soon as possible. This ensures that assets go where you (and your spouse) intend, and that your legacy is protected.
We hope these tips empower you to ask the right questions and act. The women of BCT Wealth Advisors are here to listen, advise, and champion your next steps. We are mothers, sisters, daughters, spouses, and trusted advisors who want your finances to go the distance, just like you do every day. Get in the conversation and get in touch with us!
Contributed by: BCT Wealth Advisors, BCTWealth@mybct.bank, 304-728-2435.