Should You Rollover a 401(k) to an IRA?

If you’re entitled to a distribution from your 401(k) plan (for example, because you’ve left your job, or you’ve reached age 59½), and it’s rollover-eligible, you may be faced with a choice. Should you take the distribution and roll the funds over to an IRA, or should you leave your money where it is?

Across the universe
file000290322202In contrast to a 401(k) plan, where your investment options are limited to those selected by your employer (typically mutual funds or employer stock), the universe of IRA investments is virtually unlimited. For example, in addition to the usual IRA mainstays (stocks, bonds, mutual funds, and CDs), an IRA can invest in real estate, options, limited partnership interests, or anything else the law (and your IRA trustee/custodian) allows.*

You can move your money among the various investments offered by your IRA trustee, and divide up your balance among as many of those investments as you want. You can also freely move your IRA dollars among different IRA trustees/custodians–there’s no limit on how many direct, trustee-to-trustee IRA transfers you can do in a year. This gives you the flexibility to change trustees as often as you like if you’re dissatisfied with investment performance or customer service. It also allows you to have IRA accounts with more than one institution for added diversification.

However, while IRAs typically provide more investment choices than a 401(k) plan, there may be certain investment opportunities in your employer’s plan that you cannot replicate with an IRA. And also be sure to compare any fees and expenses.

Know the Distribution Rules
The distribution options available to you and your beneficiaries in a 401(k) plan are typically limited. And some plans require that distributions start if you’ve reached the plan’s normal retirement age (often age 65), even if you don’t yet need the funds.

file000478245189With an IRA, the timing and amount of distributions is generally at your discretion. While you’ll need to start taking required minimum distributions (RMDs) from your IRA after you reach age 70½ (and your beneficiary will need to take RMDs after you die), those payments can generally be spread over your (and your beneficiary’s) lifetime. (You aren’t required to take any distributions from a Roth IRA during your lifetime, but your beneficiary must take RMDs after your death.) A rollover to an IRA may let you and your beneficiary stretch distributions out over the maximum period the law permits, letting your nest egg enjoy the benefits of tax deferral as long as possible.

The RMD rules also apply to 401(k) plans–but a special rule allows you to postpone taking distributions until you retire if you work beyond age 70½. (You also must own no more than 5% of the company.) This deferral opportunity is not available for IRAs. Note: Distributions from 401(k)s and IRAs may be subject to federal income tax, and a 10% early distribution penalty (unless an exception applies). (Special rules apply to Roth 401(k)s and Roth IRAs.)

Gimme shelter – Don’t Forget About Creditor Protection
file000419755272Your 401(k) plan may offer better creditor protection than an IRA. Assets in most 401(k) plans receive virtually unlimited protection from creditors under a federal law known as ERISA. Your creditors cannot attach your plan funds to satisfy any of your debts and obligations, regardless of whether you’ve declared bankruptcy. (Note: individual (solo) 401(k) plans and certain church plans are not covered by ERISA.)

In contrast, traditional and Roth IRAs are generally protected under federal law only if you declare bankruptcy. Federal law currently protects your total IRA assets up to $1,245,475 (as of April 1, 2013)–plus any amount you roll over from your 401(k) plan. Any creditor protection your IRA may receive in cases outside of bankruptcy will generally depend on the laws of your particular state. If you’re concerned about asset protection, be sure to seek the assistance of a qualified professional.

Let’s stay together
Another reason to roll your 401(k) funds over to an IRA is to consolidate your retirement assets. This may make it easier for you to monitor your investments and your beneficiary designations, and to make desired changes. However, make sure you understand how Federal Deposit Insurance Corporation (FDIC) and Securities Investor Protection Corporation (SIPC) limits apply if you keep all your IRA funds in one financial institution.

Fools rush in
While some 401(k) plans provide an annuity option, most still don’t. By rolling your 401(k) assets over to an IRA annuity, you can annuitize all or part of your 401(k) dollars. Many 401(k) plans have loan provisions, but you can’t borrow from an IRA. You can only access the money in an IRA by taking a distribution, which may be subject to income tax and penalties.

Is the Stock Market Rigged?

file0001031687320Is the stock market rigged in favor of high-speed electronic trading firms? Perhaps, but that shouldn’t matter to most investors.

Last week, media reports and a new book by author Michael Lewis have focused on a form of high-frequency stock trading where professional traders use sophisticated computers and complex programming to see stock orders coming in and position themselves ahead of the orders as middlemen between existing buyers and sellers.

All of this is done very rapidly, over and over again, often netting the high-frequency trader a few pennies on the stock price. While short-term traders fight it out at lightning speeds over these pennies, long-term investors are generally above the fray. If you are an investor focused on the longer term fundamentals of an investment, generally speaking, you have little to fear over the very small price moves caused by high-frequency trading.

file7781266798375High-frequency trading has been gathering headlines for 15 years. But, in recent years, this trading has shown some signs of stressing the fabric of the markets, for example, with the May 6, 2010 “flash crash,” when the Dow Jones Industrial Average dropped 1,000 points in just minutes, then rebounded by the end of the day. Investors should bear the risk of their investment; they should not have to bear the risk of whether the markets are functioning fairly or effectively. In response, regulators have taken some action.

The Dodd-Frank legislation, passed in 2010, effectively restricted high-frequency trading by the big banks. Yet, not everyone sees high-frequency trading as a negative; some mutual fund companies have publically noted that using such strategies reduces transaction costs and benefits the investors in their funds.

In short, high-frequency trading may create small inefficiencies over the short run, but for long-term investors it has little impact on achieving their financial goals.

As always, if you have questions, I encourage you to contact me at or at (925) 301-4086.

April 2014 Newsletter: Are You Ready to “Spring” Forward?

file7001235656807After a difficult winter which saw many parts of the Midwest and East Coast suffer through severe cold and snow, there is no doubt that much of the country is ready for Spring! And although many in California are likely wishing for our own winter-like conditions to ease the drought, there is still no denying the appeal of the new season.

Spring brings with it, of course, the blossoming of nature as the warmer temperatures and longer days have their desired effect. For some, the start of a new baseball season is also part of the appeal! But I think this particular Spring brings with it the possibilities for other kinds of renewal and regrowth that do not have to be limited to the natural world.

We are now five years past the 2008-09 Great Recession. The journey to the current economic recovery from that difficult time has not always been smooth or in a straight line, but a recovery has nonetheless occurred. And according to some economists, it is possible, if not likely, that the recovery in 2014 may even accelerate from the modest improvement we have seen in recent years.

This potentially more positive economic landscape may provide an exciting opportunity to seek out rejuvenation and new opportunities in your own life. For example, you could consider using this time to evaluate a different career path or new career/professional endeavors.

This could also be a great time to review your personal and financial goals and/or develop a comprehensive financial and investment plan if you have not recently done so. The seeds of those efforts, whether in your professional, personal, or financial life, could create your own Spring bounty in the future!

Earlier in March, we moved our clocks ahead for daylight savings time. Perhaps the following articles will help you “spring” forward to whatever changes you may be considering in 2014:

The Most Critical Step in Starting a Business
In today’s challenging world of traditional employment, starting your own business or endeavor might be an appealing career alternative, especially if you have an idea about how to fill an unmet market need. Here are some thoughts about preparing to make venture your fly! Read more…

Resources for Mid Life Professionals Going Back to School
It’s not unusual for people in the midst of professional change to consider going back to school to enhance their current knowledge or to enter an entirely new field. Learn about some resources that can help you evaluate such a change is right for you. Read more…

Baseball and Financial Planning
Spring training is a tradition that baseball teams and baseball fans look forward to every year. As this year’s baseball season gets under way, here are a few lessons from America’s pastime that might help you reevaluate your finances. Read more…

Impact of Health Care Costs on Social Security
Medical expenses, and particularly Medicare premiums, will likely reduce the money you receive from Social Security at the time you retire. Get the facts about the relationship between these two important US Government benefit programs, and how you can accurately plan for what you will receive from Social Security. Read more…

I hope that the turning of the season is positive for you and your loved ones, and that these articles may inspire you to move toward your goals in 2014! As always, please do not hesitate to contact me at (925) 301-4086 or send me an email if you have any questions about these or other financial topics!

The Impact of Health-Care Costs on Social Security

For many retirees and their families, Social Security provides a dependable source of income. In fact, for the majority of retirees, Social Security accounts for at least half of their income (Source: Fast Facts & Figures About Social Security, 2013). However, more of that income is being spent on health-related costs each year, leaving less available for other retirement expenses.

The importance of Social Security
NPT-HEALTHSSI0114_02Social Security is important because it provides a retirement income you can’t outlive. In addition, benefits are available for your spouse based on your benefit amount during your lifetime, and at your death in the form of survivor’s benefits. And, these benefits typically are adjusted for inflation (but not always; there was no cost-of-living increase for the years 2010 and 2011). That’s why for many people, Social Security is an especially important source of retirement income.

Rising health-care costs
You might assume that when you reach age 65, Medicare will cover most of your health-care costs. But in reality, Medicare pays for only a portion of the cost for most health-care services, leaving a potentially large amount of uninsured medical expenses.

How much you’ll ultimately spend on health care generally depends on when you retire, how long you live, your health status, and the cost of medical care in your area. Nevertheless, insurance premiums for Medicare Part B (doctor’s visits) and Part D (drug benefit), along with Medigap insurance, could cost hundreds of dollars each month for a married couple. In addition, there are co-pays and deductibles to consider (e.g., after paying the first $147 in Part B expenses per year, you pay 20% of the Medicare-approved amount for services thereafter). Your out-of-pocket yearly costs for medical care, medications, and insurance could easily exceed thousands of dollars.

Medicare’s impact on Social Security
Most people age 65 and older receive Medicare. Part A is generally free, but Parts B and D have monthly premiums. The Part B premium generally is deducted from your Social Security check, while Part D has several payment alternatives. In 2013, the premium for Part B was $104.90 per month.

file0001017820579The cost for Part D coverage varies, but usually averages between $30 and $60 per month (unless participants qualify for low-income assistance). Part B premiums have increased each year and are expected to continue to do so, while Part D premiums vary by plan, benefits provided, deductibles, and coinsurance amounts. And, if you enroll late for either Part B or D, your cost may be permanently increased.

In addition, Medicare Parts B and D are means tested, meaning that if your income exceeds a predetermined income cap, a surcharge is added to the basic premium. For example, an individual with a modified adjusted gross income between $85,000 and $170,000 may pay an additional 40% for Part B and an additional $11.60 per month for Part D.

Note: Part C, Medicare Advantage plans, are offered by private companies that contract with Medicare to provide you with all your Part A and Part B benefits, often including drug coverage. While the premiums for these plans are not subtracted from Social Security income, they are increasing annually as well.

The bottom line
The combination of rising Medicare premiums and out-of-pocket health-care costs can use up more of your fixed income, such as Social Security. As a result, you may need to spend more of your retirement savings than you expected for health-related costs, leaving you unable to afford large, unanticipated expenses. Depending on your circumstances, spending more on health-care costs, including Medicare, may leave you with less available for other everyday expenditures and reduce your nest egg, which can impact the quality of your retirement.

What Baseball Can Teach You about Financial Planning

Spring training is a tradition that baseball teams and baseball fans look forward to every year. No matter how they did last year, teams in spring training are full of hope that a new season will bring a fresh start. As this year’s baseball season gets under way, here are a few lessons from America’s pastime that might help you reevaluate your finances.

Sometimes you need to proceed one base at a time
NFP-Baseball0314_02There’s nothing like seeing a home run light up the scoreboard, but games are often won by singles and doubles that get runners in scoring position through a series of base hits. The one base at a time approach takes discipline, something that you can apply to your finances by putting together a financial plan.

What are your financial goals? Do you know how much money comes in, and how much goes out? Are you saving regularly for retirement or for a child’s college education? A financial plan will help you understand where you are now and help you decide where you want to go.

It’s a good idea to cover your bases
Baseball players minimize the odds that a runner will safely reach a base by standing close to the base to protect it. What can you do to help protect your financial future? Try to prepare for life’s “what-ifs.” For example, buy the insurance coverage you need to make sure you and your family are protected–this could be life, health, disability, long-term care, or property and casualty insurance. And set up an emergency account that you can tap instead of dipping into your retirement funds or using a credit card when an unexpected expense arises.

You can strike out looking, or strike out swinging
file3151239849849Fans may have trouble seeing strikeouts in a positive light, but every baseball player knows that striking out is a big part of the game. In fact, striking out is much more common than getting hits. The record for the highest career batting average record is .366, held by Ty Cobb. Or, as Ted Williams once said, “Baseball is the only field of endeavor where a man can succeed three times out of ten and be considered a good performer.”

In baseball, there’s even more than one way to strike out. A batter can strike out looking by not swinging at a pitch, or strike out swinging by attempting, but failing, to hit a pitch. In both cases, the batter likely waited for the right pitch, which is sometimes the best course of action, even if it means striking out occasionally.

So how does this apply to your finances? First, accept the fact that you’re going to have hits and misses, but that doesn’t mean you should stop looking for financial opportunities. For example, when investing, you have no control over how the market is going to perform, but you can decide what to invest in and when to buy and sell, according to your investment goals and tolerance for risk.

Warren Buffett, who is a big fan of Ted Williams, strongly believes in waiting for the right pitch. “What’s nice about investing is you don’t have to swing at pitches,” Buffett said. “You can watch pitches come in one inch above or one inch below your navel, and you don’t have to swing. No umpire is going to call you out. You can wait for the pitch you want.”

Note: All investing involves risk, including the possible loss of principal.

Every day is a brand-new ball game
When the trailing team ties the score (often unexpectedly), the announcer shouts, “It’s a whole new ball game!” Or, as Yogi Berra famously put it, “It ain’t over ’til it’s over.” Whether your investments haven’t performed as expected, or you’ve spent too much money, or you haven’t saved enough, there’s always hope if you’re willing to learn both from what you’ve done right and from what you’ve done wrong.

Pitcher and hall-of-famer Bob Feller may have said it best. “Every day is a new opportunity. You can build on yesterday’s success or put its failures behind and start over again. That’s the way life is, with a new game every day, and that’s the way baseball is.”

Starting a Business: Make Sure You Have a Plan!

A Business Plan Is Your Vision of Success

business-plan-writerWhat is your business’s key to success? Unique products, flawless customer service, nimble operations–or something entirely different? As a business owner, you may instinctively know what makes your organization succeed in today’s competitive marketplace. A business plan helps you share that knowledge with important stakeholders–including key employees and potential investors and lenders.

A good business plan tells the story of your company, illustrating where you are now and where you hope to be in three to five years. It provides a detailed description of your organization’s current state and paints a picture of what it will look like in the future. Most important, it provides–in as few words as possible–the information others will need to make financial and strategic decisions, and is typically organized using the following sections.

Cover page and table of contents
The cover page is simply a title page for your business plan document. It should include the name of the company, address, phone number, owners’ names, and contact information. It should also include the date on which the document was finalized and published. The table of contents helps readers navigate through the document and identifies page numbers for each of the sections.

Executive summary
The executive summary is essentially your elevator pitch–an abridged version of the business plan that describes to readers why your business is worthy of their attention and possibly their investment. It should be no longer than one page, but should contain all pertinent details.

For this reason, it is often easier to write this section last. It should answer readers’ primary questions–i.e., are you looking for funding, is the document a roadmap for management, or both? As you draft your executive summary, keep in mind that many readers will decide whether the subsequent pages are worth reviewing based on this important section.

Business description
great-business-plan1This section should provide more detail on the nature of your business. What product or service do you provide, and how is it produced? Who are your key advisors and managers, and how does their experience benefit your organization?

What is your legal structure? Where are you located and why did you choose this location? You might also want to use this section to describe the genesis of your business–i.e., how and why you decided to launch the venture. Was there an industry gap you wanted to fill? A need you could meet? What makes your business idea worth pursuing?

Market analysis and marketing strategy
Perhaps the most influential section of your business plan, the market analysis is how you convince readers that your business will be successful. It should provide a specific and detailed analysis of your target market, including what you have done to maximize your opportunity within it. Who are your current and potential customers, and why?

Summarize any market research you have conducted to prove the viability of your business. How big is your potential market? Who are the major competitors, and what is your strategy for differentiating your company from them? If your business plan is intended for potential investors or lenders, this section will help convince them that you truly understand your market and are an expert in your industry.

If your plan is primarily designed to educate key employees, it will provide the basic information they need to strategize. This section should also summarize your marketing strategy, or how you will promote your products and services. Describe any planned advertising and communications tactics, as well as sales models.

This portion of the business plan is designed to help your readers understand where you are now, financially, and where you hope to be. You should include all current and projected (or “pro forma”) financial statements. These should include cash flow and income statements, as well as a balance sheet and break-even analysis. This section will likely be scrutinized the most, so be sure it is completed carefully. Its purpose is to educate readers about the use of resources–including any debt and equity financing you hope to get–proving to them that your company can and will manage money effectively.

Take time and care
Many business owners–particularly entrepreneurs just starting out–loathe spending time writing business plans, preferring instead to jump into the more exciting arenas of creating, selling, and managing their business. However, a business plan represents a critical opportunity to draw key stakeholders into your vision of a future filled with success. Be sure to devote the time needed to produce an effective and engaging document.

March 2014 Blog: Can You Win “Investment” Gold?

It’s not often that we can gain investment insights from an 18-year-old wunderkind.

1_3a104b11a55dd074a15f7c05a91b6a17Many of us marveled at the performance of American Mikaela Shiffrin at the Sochi Winter Olympics, where she became the youngest Olympic slalom champion. What makes Shiffrin remarkable is not only her success, but also her approach to the sport. Unlike many of her peers, while training she focused more on technique and practice — the discipline of ski racing — rather than on competing.

When Shiffrin lost footing and became airborne on the course, she was able to regain her position quickly as she had practiced her recovery many times before. Throughout all of her training, she took the long-term view. It can be difficult to take the long-term view in investing, particularly when we are challenged by bumps on the slope.

February, for example, provided investors with mixed signals. Colder and snowier-than-usual weather adversely affected many economic reports, causing uncertainty over the health of the economy to linger. Several high-profile companies also cited the negative impact of weather on future earnings.

Looking at the bigger picture, however, helps us regain our sense of balance. U.S. stock prices appear to be looking past weather disruptions and have rebounded back to near record highs following a soft start to the year. We see underlying strength in most economic indicators including a continued recovery in the housing market, which is supported by easier mortgage availability, limited home inventory, and near-record housing affordability.

20120121-RoyersfordPA-WinterStormLimerickSquare__5MF_Absent a severe storm in March, we expect more clarity on the health of the overall U.S. economy in April, when March economic data are released, and we still expect economic growth, as measured by real gross domestic product (GDP), to reach 3% in 2014, based upon many of the drags of 2013 fading, including U.S. tax increases and spending cuts and the European recession, and growth accelerating from additional hiring and capital spending by businesses.

The bond market also hit some bumps, as Puerto Rico was downgraded during the month by all three major credit rating agencies as a result of its large debt burden and multi-year recession. But municipal bond market investors have been thinking longer term and appeared to take the downgrades in stride by noting Puerto Rico is not reflective of the overall market.

Just last week, the broader bond market appeared to corroborate the move in stock prices by ignoring another batch of weather-impacted data and anticipating better growth. Bond investors also refocused on a Federal Reserve that remains on schedule to reduce bond purchases and eventually raise interest rates in late 2015.

Policymakers in Washington, D.C. appear to be taking the longer view as well by focusing less on partisan differences and more on overall economic health. Congress agreed to a “clean” debt ceiling increase without links to the Affordable Care Act or the Keystone XL pipeline.

This “clean” bill acted as a positive for the stock market, which may have rallied on the perception that a more business-friendly legislative environment may be developing. We continue to expect a 10-15% gain for U.S. stocks in 2014, as measured by the S&P 500 Index. (Derived from earnings per share for S&P 500 companies growing 5 – 10% and a rise of half a point in the price-to-earnings [PE] ratio.)

As we look back at the concerns we’ve had during the past month, we realize — just as Mikaela Shiffrin did on her gold medal run — that we’ve been here before. We know we can trust the discipline and practice of sound investing and stay focused on our long-term goals. Even those of us who are industry veterans can take a lesson from the young champion.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult me prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The economic forecasts set forth in this letter may not develop as predicted.

This research material has been prepared by LPL Financial.

Second Careers: Resources for People Returning to College

You’ve decided to go back to school–congratulations! As it turns out, you’re not alone. According to the National Center for Education Statistics, the number of full-time students age 65 and over in degree-granting schools increased 36% between 2007 and 2009, while the number of 50- to 64-year-old full-time students increased 42%.

OxfordceremonyHeading back to college later in life can be both fulfilling and fruitful; however, the many decisions involved–from choosing the right school and determining a course of study to budgeting for the various costs–can be overwhelming. Fortunately, a number of resources exist for older adults seeking information about higher education devoted to their needs.

A few years ago, the American Association for Community Colleges launched the Plus 50 Initiative, which encourages community colleges across the country to develop programs for those age 50 and older. The website provides links to college search tools and financial aid tips. is a nonprofit organization devoted to helping baby boomers seeking new careers that are dedicated to serving the greater good. Among the many programs the organization runs is the Encore College Initiative, which provides resources for individuals looking for specific college-level programs for older adults.

Elderhostel, Inc., a nonprofit organization that provides educational and travel opportunities for retirees, helps support Lifelong Learning Institutes. Through these locally run membership organizations, participants select courses based on needs, interests, and the simple desire to learn. Most LLIs are sponsored by local colleges and universities, and offer a wide variety of programs.

Finally, many colleges and universities offer discounts–and, in some cases, even free tuition–for students over age 65. Consider starting your search by calling a local institute of higher learning and asking about special programs for seniors

It’s December 31: Do You Know Where Your Money Is?

NFP-YrMoney1213_02December and January are the perfect months to look back at what you earned, saved, and spent during the past year, as W-2s, account statements, and other year-end financial summaries roll in. So before Punxsutawney Phil comes out of his burrow to predict when spring is coming, take some time to get your financial house in order.

How much have you saved?
Whether you simply resolved last year to save more or you set a specific financial goal (for example, saving 15% of your income for retirement), it’s time to find out how you did. Start by taking a look at your account balances. How much did you save for college or retirement? Were you able to increase your emergency fund? If you were saving for a large purchase, did you save as much as you expected? Challenge yourself in the new year to save a little bit more so that you can make steady financial progress.

How did your investments perform?
Review any investment statements you’ve received. How have your investments performed in comparison to general market conditions, against industry benchmarks, and in relationship to your expectations and needs? Do you need to make any adjustments based on your own circumstances, your tolerance for risk, or because of market conditions?

Did you reduce debt?
file0001117539012Tracking your spending is just as important as tracking your savings, but it’s hard to do when you’re caught up in an endless cycle of paying down your debt and then borrowing more money, over and over again. Fortunately, end of year mortgage statements, credit card statements, and vehicle financing statements will all spell out the amount of debt you still owe and how much you’ve really been able to pay off. You may even find that you’re making more progress than you think. Keep these statements so that you have an easy way to track your progress next year.

Where did your employment taxes go?
If you’re covered by Social Security, the W-2 you receive from your employer by the end of January will show how much you paid into the Social Security system via payroll taxes collected. If you’re self-employed, you report and pay these taxes (called self-employment taxes) yourself. These taxes help fund future Social Security benefits, but many people have no idea what they can expect to receive from Social Security in the future. This year, get in the habit of checking your Social Security statement annually to find out how much you’ve been contributing to the Social Security system and what future benefits you might expect, based on current law. To access your statement, sign up for a mySocialSecurity account at the Social Security Administration’s website,

Has your financial outlook changed during the past year?
Once you’ve reviewed your account balances and financial statements, your next step is to look at your whole financial picture. Taking into account your income, your savings and investments, and your debt load, did your finances improve over the course of the year? If not, why not?

Then it’s time to think about the changes you would like to make for next year. Start by considering the following questions:

1) What are your greatest financial concerns?
2) Do you need help or advice in certain areas?
3) Are your financial goals the same as they were last year?
4) Do you need to revise your budget now that you’ve reviewed what you’ve earned, saved, and spent?

Using what you’ve learned about your finances–good and bad–to set your course for next year can help you ensure that your financial position in the new year is stronger than ever.

Women Face Unique Retirement Planning Challenges

Women can face special challenges when saving for retirement. Generally speaking, women tend to spend less time in the workforce, and when they do work, they typically earn less than men in comparable jobs. As a result, women’s retirement plan balances, Social Security benefits, and pension benefits are often lower than their male counterparts. In addition, women generally live longer than men, so they typically have to stretch their retirement savings and benefits over a longer period of time.

WideModern_Entrepreneur_120513620x413What can you do to maximize your chances of achieving a financially secure retirement? Start saving as soon as possible. The best time to start saving for retirement is in your 20s; the second best time is right now. At every stage of your life, there will always be other financial needs competing with the need to save for retirement. Don’t make the mistake of assuming it will be easier to save for retirement in 5, 10, or 15 years. It won’t. Start small, with whatever amount you can afford, and contribute regularly, adding to your contribution when you can.

If you’re in the workforce, an employer retirement plan like a 401(k) plan can be a convenient, no hassle way to get started and build your retirement nest egg–contributions are deducted automatically from your paycheck and may qualify you for employer matching funds. If you’re out of the workforce and married, you can contribute to an IRA (traditional or Roth), provided your spouse earns enough to cover the contributions.

In many cases, your job is your lifeline to being able to save for retirement. Before leaving the workforce for family obligations, consider exploring with your employer the possibility of flexible work arrangements, including telecommuting and part-time work, that might enable you to continue to earn a paycheck as you balance your family obligations.

Start planning now by taking the following steps: (1) set a retirement savings goal; (2) start saving as much as you can on a regular basis, and track your progress at least twice per year; and (3) find out how much you can expect to receive from Social Security at