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Women & Investing “Who Wants To Be a Millionaire?” is not just a rhetorical question |
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Ironic, isn’t it? The best time for a woman to begin preparing for retirement is when she’s least
likely to be thinking about it or be in a financial position to begin funding her retirement.
But the numbers don’t lie. If you are a woman in your early twenties, now is the best time to start saving. Waiting until your family is established or until you can afford to put money aside for retirement can really cost you in terms of precious time lost to the benefits of compounding. In fact, studies conducted by U.S. Global Research indicate that investing $2,000 at the beginning of each year from the time you are 25 for 41 years at an 11-percent compounded rate could hypothetically garner you $1,291,654 by the time you are age 65. (See chart below)
However, not just any old savings account will get you to your goal of financial independence by the time you are 65. To optimize your savings’ earning potential, consider a tax-favored investment that encourages regular, affordable investing. Individual retirement accounts (IRAs), despite their $2,000 annual contribution limit, are an attractive, accessible long-term investing avenue. And should the annual contribution limits be increased (see page 10), your potential return could be even higher. Claudia Moncada, a 25-year-old administrative assistant who has worked at U.S. Global Investors for almost two years, doesn’t have to be convinced. She sees the advantages of getting an early start in her work with shareholders in the company’s retirement accounts. “My family originally got me thinking about saving for retirement. My dad, Mauro, is self-employed and is really good about saving money for his retirement,” Moncada said. “Now I’m trying to convince a friend to participate in her company’s retirement savings plan.” “I can put more in (retirement accounts) since I’m single and don’t have my own family yet,” she added, noting that she contributes to an IRA and puts seven percent of her pay into a 401(k). "I want to retire early, so it’s great that I have the money to put away now for when I retire.” “Sure it’s good to have a savings account, but you can’t invest with it or get a good return on it,” she concluded. "My advice to other women my age is, ‘Don’t wait to start investing. You can’t make up that lost time later.’ ” Now that you know just how beneficial starting early can be, you can act right away. Go to www.usfunds.com and click on Retirement/IRA for applications and various IRA options. Or call 1-800-US-FUNDS to speak with an investor representative about IRAs. And, if you know a woman in her early to mid-twenties — your daughter, granddaughter, a friend or colleague — encourage her to open an IRA and feel confident that you have had a part in her future financial security. |
| Reprinted with permission from Women and Investing/ It’s your money, published by The Nasdaq Stock Market, Inc. |
