Essential Financial Moves Every Woman Should Make Before Retirement: Unlocking Key Government Benefits

Jeanette Moore
Published Jul 4, 2024

Essential Financial Moves Every Woman Should Make Before Retirement: Unlocking Key Government Benefits

Preparing for retirement can be a complex process, especially for women who often face unique financial challenges.

To ensure a secure and comfortable retirement, it's crucial to take specific steps well in advance.

Here are the essential financial moves every woman should make before retiring, including how to maximize available U.S. government benefits.

Step 1: Assess Your Financial Situation

  1. Evaluate Your Savings: Review your current savings and investments. Aim to have at least 10-12 times your final year's salary saved by the time you retire.
  2. Debt Reduction Plan: Pay down high-interest debt as soon as possible. Entering retirement debt-free will provide more financial flexibility and peace of mind.

Step 2: Maximize Retirement Accounts

  1. 401(k) and IRA Contributions: Make the most of your retirement accounts by contributing the maximum allowable amount. For 2024, the contribution limit for a 401(k) is $22,500, with an additional catch-up contribution of $7,500 for those over 50.
  2. Roth IRA: Consider opening a Roth IRA if you don't already have one. Contributions are made with after-tax dollars, and qualified withdrawals in retirement are tax-free.

Step 3: Understand Social Security Benefits

  1. Estimate Your Benefits: Use the Social Security Administration's online tools to estimate your benefits based on your earnings history. Knowing your potential monthly benefit can help you plan more effectively.
  2. Optimal Claiming Age: While you can start claiming Social Security benefits at 62, waiting until your full retirement age (around 66-67) or even until 70 can significantly increase your monthly benefit.

Step 4: Leverage Government Benefits

  1. Medicare: Enroll in Medicare during your initial enrollment period, which starts three months before your 65th birthday and ends three months after. Understanding the different parts of Medicare (A, B, C, and D) will help you choose the right coverage for your healthcare needs.
  2. Supplemental Security Income (SSI): If your income and resources are limited, you might qualify for SSI, which provides additional financial support. This program is especially helpful for those who have not accumulated substantial retirement savings.
  3. Medicaid: For those with lower incomes, Medicaid can help cover healthcare costs that Medicare doesn't, such as long-term care. Eligibility varies by state, so it's important to check your state's specific requirements.

Step 5: Plan for Healthcare Costs

  1. Health Savings Account (HSA): If you have a high-deductible health plan, consider contributing to an HSA. Contributions are tax-deductible, and withdrawals for qualified medical expenses are tax-free.
  2. Long-Term Care Insurance: Evaluate the need for long-term care insurance to cover potential future costs of assisted living or nursing home care, which Medicare and standard health insurance typically do not cover.

Step 6: Diversify Your Investments

  1. Adjust Your Portfolio: As you approach retirement, shift your investment portfolio to reduce risk. This often means moving from stocks to more stable investments like bonds and annuities.
  2. Dividend-Paying Stocks: Consider including dividend-paying stocks in your portfolio to provide a steady income stream during retirement.

Read: Unclaimed Funds: Secrets To Track Down Missing Bank Accounts & Investments


Taking these essential steps will help ensure a more secure and enjoyable retirement.

By evaluating your financial situation, maximizing retirement accounts, understanding Social Security and other government benefits, planning for healthcare costs, and diversifying your investments, you can build a solid foundation for your retirement years.

Don't wait—start making these moves today to secure your financial future.

Previous article: Unveiling The Average Social Security Benefit At 62, 67, And 70: A Guide For Families

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