The Women’s Guide to Retirement: An Investing Plan for Women of All Ages

In our May 2021 issue, “The Women’s Guide to Wealth,” I discussed why women’s financial status and wealth lagged behind men’s and suggested ideas on how to build our wealth.

Now, here we are three years later, and women have one-half the amount of retirement savings that men have accumulated; our Social Security checks are just 81% of the total that men receive; and we earn 83.6% of the average man’s salary. No wonder we’re behind in the game!

I’ve been in the business world for more than 40 years and have owned my own business for three decades. And like most women, I have experienced many career and personal hiccups simply due to gender prejudice. Consequently, the fact that we haven’t made more progress than these statistics reflect makes me so angry!

But it’s usually not my style to be brazen and radical in responding to these slights (although I have had occasion to do just that!). Instead, I’ve always found that just doing my job, working hard, and standing up for myself have served me well.

However, while those qualities are admirable and ones that both men and women should strive for, they are not enough to secure your financial future. For that to happen, we need to determine what our financial goals are and create a deliberate, disciplined plan to reach those targets.

Men have it a little easier, as you can see from the above statistics.

Additionally, we women face certain challenges that can work against our plan, including:

We live longer. According to JAMA’s recent study, women have an average life expectancy of 80.2 years, while men live an average of 74.8 years. That means—we have an extra five and a half years to make our savings and investing dollars last.

And if you are fairly young, chances are you are going to live even longer because the gap between men’s and women’s life expectancy is actually widening, due to:

• COVID-19, which News-Medical.net reports presents a 20% higher risk of death for men than women.
• Unintentional injuries, such as drug overdoses, which have been increasing, especially for men, since the pandemic.
• Chronic health conditions, which may be due to higher rates of smoking, alcohol consumption, and drug use. Plus, men are more reluctant to go to the doctor.
• Men tend to take bigger risks, such as biking, driving drunk, and homicide.

We make less, dollar per dollar, than men. See above.

Women tend to bear most of the costs of getting married. With the average wedding running about $29,000, you might want to consider eloping, and then investing that hefty sum in your retirement plan!

Women often have children and leave the workforce for a period of time. The “motherhood penalty” is real, and according to the National Women’s Law Center, it costs mothers about $16,000 a year in lost wages.

Women are more likely to be the primary provider of elder family care, either by taking time out of the workforce to care for parents or by contributing financially. Either way, those efforts can set you back tens of thousands of dollars every year.

Divorce generally leaves women in a worse financial position. A report by CNBC noted that, on average, women are more negatively financially impacted by divorce, especially women over the age of 50. For that age group, their household income can drop by up to 40% in the year after divorce.

With all of these challenges, you can see why we women need to be better planners and stewards of our money.

And that means starting as early as you can and investing as much as you can.

Above All—Don’t Stick Your Head in the Sand and Hope for the Best!

Believe me, that is not the solution to building wealth, but, unfortunately, it is what many people—especially women—do when thinking about saving for retirement.

I’ve heard a lot of sad stories from women over the years, including:

• Being doubly taken advantage of because you’ve allowed someone else to be responsible for your finances. During my years in banking, I met more than a few women who knew nothing of their financial situations—their husbands handled everything. And when their spouses died, many were subsequently swindled by con men dressed up as “financial advisors.”
• Falling for “too good to be true” scams. I also had a work associate who fell for a “romance” scam and ultimately lost her job, home, and close relationships with her family and friends. She died almost penniless.
• Women who made some pretty big financial mistakes (such as buying a home that they couldn’t afford) that have taken years to recover from, resulting in significant hits to their retirement savings and goals.
• Divorcees who struggled to survive after their splits, with little hope for making their next mortgage payment, much less saving for retirement. I’ve been acquainted with more than a few women who married “well,” turned financial control over to their spouses, and were subsequently devastated—and financially ruined—after a divorce.
• Women whose husbands left them with hundreds of thousands of debt to repay.
• Professional women who always thought they’d have plenty of money for retirement, and didn’t, because they never developed a savings/investing plan.
• Women who don’t believe they will ever have enough money to retire, and so plan on working forever. That’s fine if that’s what you want to do, but not so great if you would like to retire.

This thought process is a result of having no financial plan. In other words, thinking about retirement for these women is just one big guessing game. And by the way, 10.6% of the workforce (and rising) is over 55, according to the Bureau of Labor and Statistics, showing that having no plan is a bad plan.

As you can see from the following chart, women are seriously behind in our saving/investing strategies—in every age group.

Source: Transamerica Center for Retirement Studies

But you know what, it’s never too late to develop a plan. You may not achieve the “golden” retirement you had hoped for, but at least you can propel your finances in the right direction.

Your plan won’t be without challenges, but the steps are fairly simple, and I promise you, your journey will get easier as you develop a savings/investing mindset—a disciplined approach to building wealth. The result will be well worth it!

Let’s get started.

Step 1: Ascertain Your Financial Status

You can’t figure out where you are going until you learn where you are. That means preparing a budget. Here are some tips from savvyladies.org:

1. Calculate Your Income

• Salary
• Bonus
• Commissions
• Alimony/Child Support
• Social Security
• Interest/Dividends

Next, deduct your taxes to get your net income.

Step 2: Understand Your Spending and Tighten Up Your Pocketbook

I recommend that you track every dollar you spend for a minimum of two weeks (longer if you can, since there are some expenses that occur less frequently than biweekly). A month would be great, and three months would be exceptional!

Before you start jotting down your expenditures, it’s important to create categories for spending, such as the ones below:

Average approximate expenses distribution as a percent of income:

Source: FultonBank.com

Next, you’ll need to divide those broad categories into subcategories such as:

Note that the above categories are the necessities—your non-discretionary spending.

Of course, you spend more money than that! That’s why you’ll need to track all your expenses (including your daily coffee addiction!). Once you do that, you’ll begin to really see your spending patterns—especially all those things that are discretionary—the extras that you may not actually need.

This is where discipline comes in. Ask yourself, do I really need to stop by Starbucks every morning? I don’t really like coffee, but I love mocha Frappuccinos. But at $6+ a pop, I refuse to buy one more than once a week. So, I found a mocha mix on Amazon, bought some espresso, added milk, and my Frappuccinos now cost $1.10 each!

Another funny example is when my sister and I had to talk my mother into giving up her driving privileges. After the first month, she yelled at us, saying that we must have goofed up her checking account as she ended the month with a couple of hundred dollars more than she usually had. We explained that since she wasn’t driving herself to Kroger and Walmart every day, she wasn’t impulse shopping, buying stuff she really didn’t need. We had been telling her for years that she was wasting her money, but she didn’t believe us until she saw that extra money sitting in her checking account!

I’ve put myself on strict spending regimens several times in my life. It’s like losing weight—but instead of thinking about every bite of food you eat, you think about every item you are purchasing, and decide whether you really need it or would rather invest it and put that money to work for you. Believe me, after a couple of weeks of realigning your thinking, you will be amazed at how much you have saved!

Step 3: Create a Spending/Savings Model

One of the saving rules that many financial advisors advocate and that you may find helpful is the 50/30/20 rule, which recommends this income allotment:

• Fixed costs that stay the same month after month, such as your rent or mortgage, car payment, and cable bill, should add up to 50% of your income.
• Variable costs that can change from month to month, such as entertainment, groceries, and clothing, should take up 30% of your income.
• Savings should take up 20% of your income.

Step 4: Financial Recovery Dos and Don’ts

At some point in life, many people—both men and women—find themselves at a financial crossroads, often due to a sudden crisis such as an illness or accident.

According to Bankrate.com, “Around three in four (74%) U.S. adults have a financial regret. Most commonly, Americans regret not saving for retirement early enough (21%), taking on too much credit card debt (15%) or not saving enough for emergency expenses (14%).”

Any of these circumstances can lead to financial hardship or even catastrophe.

I hope this is not the scenario you are facing. But if you face mounting financial challenges, it’s important to know that this state doesn’t have to be permanent. There are steps you can take to recover and change your mindset to a savings/investing strategy that will help you secure a more stable financial life. Here are a few ideas:

1. Create an action plan to rise above the crisis. Be honest with yourself and realistically assess your resources.
2. Prioritize urgent expenses, such as housing, utilities, food, and transportation needs.
3. Ask for help. If you find that your income does not cover all your outstanding bills, contact your creditors to let them know your financial situation as soon as possible. Inquire as to any temporary hardship programs that may be available to you; ask to lower your credit card interest rates; or perhaps you can request a temporary moratorium on your payments until you can get on your feet.
4. Consult your local 211.org for a list of resources in your area, such as food assistance, medical needs, unemployment resources, and utility assistance. There may also be internet resources if you are working or attending educational classes from home, as well as free education resources that may be available.
5. Use the services of a professional debt management organization. Non-profit credit counselors are a tremendous resource to help you evaluate your financial situation and find workable solutions to address your concerns. The National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA) can help you find a credit counselor in your area.

Here are the top-rated debt management companies according to Forbes:

• National Debt Relief
• American Consumer Credit Counseling
• Money Management International

If these steps won’t work for you, you’ll need to find a good attorney to help you wade through any potential insolvency issues. Check your state or local bar association for referrals.

Get control of your spending. I know a woman whose bad financial decisions led to outstanding credit card debts of almost $200,000. She was close to filing for bankruptcy, but she woke up one day and decided to get control. She put her home up for sale (it was a bad real estate cycle; she didn’t make any money on it, but felt grateful to just about break even). She moved to a very small home for three years (after living in a pretty luxurious mini-mansion). She watched every single penny that she spent, only buying absolute necessities. And she entered a debt management program for four years. The good news: she was totally out of debt in four years and began aggressively rebuilding her retirement program.

Sure, it took a lot of discipline and hard work. But this example shows that it can be done! Hopefully, your financial circumstances are not nearly so dire, so you should feel very optimistic that rerouting your long-term money outlook is very possible and that a change in direction can greatly enhance your future golden years.

Step 5: Set a Savings/Investing Goal

Now it’s time to begin building your financial future. What are your financial goals? You probably won’t be surprised to find out that men and women often have different financial goals.

Most of my male friends have specific monetary goals, usually for the long term, such as saving for college for their children, purchasing a home, purchasing a vacation home, and saving for retirement—at least a million dollars in liquid assets for most of them.

In contrast, my women friends tend to break their goals down into smaller pieces, and for shorter terms. Their goals include paying off debt, childcare, elder care and vacations.

A frightening statistic I recently ran across was in a report by Mylo Financial Technologies, which found that men had set aside nearly twice as much money for their long-term financial goals as women. That is frightening!

My mother always said, “Pay yourself first.” And that advice is as good today as it was decades ago. It is the key to a long-term savings plan.

Once you have completed your budget, go on a strict money diet. First, set a minimum amount to save each week, and then add to it gradually. Every time you get a raise, allocate at least 90% of it to your savings.

If your employer offers a 401(k) plan, enroll asap! Most companies offer some sort of matching funds for the dollars you invest. That constitutes free money and can help build your savings much faster.

Contribute to your company’s 401(k) plan to the maximum. According to the Plan Sponsor Council of America, 98% of companies that offer 401(k)s also match part of your contribution. And the average match is 4%-6%.

For 2024, you can contribute up to $23,000 to a 401(k), up from $22,500 last year. And if you are age 50 or older, you can make a catch-up contribution, adding an additional $7,500 —for a maximum contribution of $30,500.

Open and regularly contribute to an Individual Retirement Plan. For 2024, you can contribute $7,000 to an IRA; $8,000 for folks older than 50.

Set up an automatic saving plan to transfer a fixed percentage of your paycheck to a bank or brokerage account every pay period.

If you receive a bonus, save ALL of it and only spend money you earn from your salary.

Step 6: Find a Good Financial Advisor

Certainly, you can create a saving/investing plan on your own. But if this is all new to you—if you’re either just starting out or you have a lifestyle change that requires that you rethink your financial future, you would benefit greatly from talking with an expert. At the very least, he or she can help you review possible scenarios so that you can select the best one for your personal needs.

At a minimum, a good advisor will help you see your entire financial picture, formulate specific goals, and assist you in developing a plan to achieve them. If you are nearing retirement, they can be especially helpful in forecasting your retirement income based on your assets, estimating when you can retire, giving you a good idea of how much money you can spend annually in retirement, and how many years you can expect your money to last.

I’m sure you’ve heard how expensive “good” financial advisors are, and they can be. Many charge fees of 1%-2% of the total amount of your portfolio. But that is not what I’m talking about here. I just want you to find an experienced advisor to help you develop a plan. There is no reason why you cannot manage your own savings/investing portfolio—once you get your sea legs. Don’t let anyone tell you that you can’t do it!

It’s best to find someone who will simply charge you an hourly fee or a project fee for his or her efforts in helping you develop your goals and plan. Be very specific that this is what you want and need. This person will look at your complete financial picture (assets, debts, income and expenses) and help you determine how much money you can begin to set aside for your long-term goals.

And over time, as your savings/investing portfolio grows, you may certainly choose to employ a more sophisticated financial advisor who may offer you more comprehensive services, but you don’t really require that level of service at this point.

If you have a preference, you should know that women actually comprise more than 32% of financial advisors.

Gender is simply a personal preference. Some of the other important factors in choosing a good advisor can be found in this checklist:

• Request references (it’s good to get a referral from someone you know and trust).
• What licenses does the advisor hold? There are three designations a qualified financial planner might have, including:

Certified Financial Planner (CFP). A CFP has expertise in financial planning, taxes, insurance, estate planning, and retirement. The designation is earned after completion of exams sanctioned by the Certified Financial Planner Board of Standards, Inc., as well as ongoing required education.

Chartered Financial Analyst (CFA). The CFA designation is given by the CFA Institute (formerly the Association for Investment Management and Research, or AIMR), which measures and certifies the competence and integrity of financial analysts. Candidates must pass three levels of exams, in accounting, economics, ethics, money management, and security analysis.

Certified Public Accountant (CPA). A CPA is a designation for licensed accounting professionals and is provided by the Board of Accountancy for each state. If you have tax questions, a CPA is the person to consult, including tax implications of certain investments you may want to investigate and purchase.

• How are fees charged? There are three basic compensation models for financial advisors:

Commission-Based Advisors receive a commission from the products they sell. The sales reps at your brokerage firm or insurance company may make a salary, but the bulk of their income is from selling products. They tend not to be that objective, and may not have a fiduciary relationship with their clients, which means they have to look after your best interests.

Fee-Only Advisors are just the opposite of commission-based pros. They do not receive commission on products that they sell. They should be objective and offer unbiased advice. Fee-only advisors normally work in RIA (Registered Investment Advisor) firms and operate with a fiduciary standard of care.

Fee-Based Advisors are a mix of the two above. They receive a fee for advice but also receive commissions on sales. They can work in a brokerage, insurance, or RIA firm.

For your purposes, I would (as I mentioned above) recommend a fee-only advisor at this time.

How Do You Find a Good Financial Advisor?

There are several methods for locating a good financial advisor, including:

• Word of mouth. A referral from someone you know and trust.
• The National Association of Personal Financial Advisors.
• Garrett Planning Network.
• The CFP Board.
• Ranking by financial sites, although many of these are focused on providing services to the ultra-wealthy.

Step 7: Two Important Decisions

When Should You Take Your Social Security Benefits?

Now, if you are not nearing retirement, you can just skip this section. But if you are in your 50s or older, you do need to read this.

You’ve worked hard all of your life, and now, finally, you’re going to get a reward—your Social Security check!

But as you can see in the chart below, the average Social Security benefit (as of December 2023) is not that fabulous and is actually less than the average rent in the U.S. of $1,536 (as of August 2024).

The Average Social Security Benefit for Men and Women at Ages 62 - 70

Source: The Social Security Administration.

You can, of course, retire as early as age 62, but if you do so, your Social Security benefits may be permanently reduced by 25% to 30% from the amount you could get at full retirement age.

Alternatively, if you choose to delay your benefits, as you can see in the chart above, you can significantly increase your monthly check.

Each year the maximum benefits increase. For example, if you retire at age 62 this year, your maximum benefit would be $2,710. However, if you retire at your full retirement age this year, your maximum benefit would be $3,822. And if you are age 70 in 2024 and you choose to retire, your maximum benefit would be $4,873.

Here’s a chart so you can determine your full retirement age. As you can see, for most folks today, you’re looking at a full retirement age somewhere between 66 and 67. So, at that time, you can collect the maximum benefit for full retirement. However, if you wait until age 70, that benefit increases. For every year that you delay receiving your benefits, your Social Security payments will rise by about 5% to 8%.

Source: socialsecurityintelligence.com

You can go to the Social Security website to get an estimate of your Social Security benefits at early, full retirement, and maximum ages.

As life expectancy continues to increase, you may want to explore delaying your retirement benefits until age 70, so you can maximize your earnings.

The chart below shows you the approximate break-even point of receiving your benefits early compared to waiting for your maximum benefit.

As you can see, if you take your benefits at age 62, you’ll be ahead until about age 79. At that time, you would break even, some 17 years later. If you wait until age 70, your break-even age would be about 82 ½ years of age. After that, your total benefit (over your lifetime) will grow more than if you take your benefit earlier.

You can use this calculator to determine your break-even point.

Ultimately, your decision as to which age you decide to take your Social Security benefits will depend on:

Your life expectancy. You can estimate your life expectancy using this calculator, which takes into account your sex and date of birth.

And you can adjust it based on your family’s longevity history. This site says my life expectancy is 87.6 years, and my Social Security breakeven point is 82 ½ years (by taking my benefits at age 70), that gives me an additional five years to take advantage of my increased benefits. Yahoo!

Your health. Your health issues may encourage you to retire early, or you may need to keep your job in order to make sure you have health insurance (a concern if you retire before Medicare kicks in at age 65).

I have a friend who will be 62 next year, and she would really like to retire at that time. Her husband passed away four years ago, so one-half of her income-producing team is gone. She, fortunately, has a job that offers insurance, and she has enough assets to rely upon (in addition to her expected Social Security check) for her retirement years. But until she turns 65, she feels forced to keep working just to retain her health insurance. Otherwise, she would be paying more than $1,000 a month to buy her own insurance.

Your income needs. You’ll need to consider your current expenses. If you still have a mortgage or dependents, you may need to delay your retirement to a later date.

Whether you will need a part-time job during retirement to supplement your income. If so, you need to be aware that your Social Security benefits may be taxed if you are earning additional income.

For example, in 2024, according to SSA.gov, if you earn between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits. And if your income is more than $34,000, up to 85% of your benefits may be taxable.

Should You Pay Off Your Mortgage Before You Retire?

Here, there are two schools of thought.

Pros: Paying off your mortgage early may give you peace of mind and less stress, can save you thousands of dollars in interest, increases the equity in your home should you need to tap into it someday, and it also can turn that monthly cash outlay into freed-up cash flow that you can use to invest or use for one of your other life goals, or…

Cons: You could have hundreds of thousands of dollars tied up in your home, which may be difficult to access (especially in a bad real estate market) if you need the funds; you will no longer have mortgage interest to deduct on your tax return; and the money you are using to pay down your mortgage can possibly be used to generate more cash flow by investing it.

For example, if you have a low mortgage rate (say, 2.5% - 6%) and you can make even an average return on your investments (10% annually is the historical norm), doesn’t it make more sense to keep paying that low mortgage rate and redirect the funds you would have used to pay off your mortgage into good investments with higher returns?

Investing can be risky, so you’ll want to make sure you are investing wisely.

Now, let’s move on to the question of working past retirement age.

Why Most Women Will Need to Work After the Normal Retirement Age

A recent study by the BLS showed that older women remain an important part of the workforce. In fact, “between April 2003 and April 2023, the labor force participation rate among women aged 55 to 64 climbed to 59.6% from 56.6% and the rate for women over the age of 65 grew to 16.0% from 10.6%.”

The BLS also forecasts that between 2020 and 2030, more than 60% of growth in the labor force will be from workers aged 65 and over. And participation from women over 55 will increase to 11.7%, and half of that growth will come from women aged 65-74.

You can see in the chart below that older women will increasingly become a larger share of the labor market.

There are several reasons why women may want to work past the “normal” retirement age, including:

• Their savings plus Social Security will not allow them to live comfortably.
• They want to continue earning money to maximize their retirement benefits.
• They desire to stay active—both physically and mentally.
• They allocate the extra income for specific goals, such as vacations, grandchildren’s college funds, or future elder care needs.

So, the question becomes, what kind of jobs are available to older women?

Jobs Available to Post-Retirement-Age Women

I came across a recent article on Investopedia which highlighted such jobs, noting that “the best jobs for women over age 50 are in real estate, education, and the financial sector.” I can agree with that assessment, as I’m over 50 and work in both the real estate and financial sectors.

In fact, the National Association of Realtors reports that 65% of all Realtors are female, and their median age is 55. Where I live in Tennessee, I think the average age is skewed higher, possibly into the mid-60s. I actually know a handful of female agents who are in their early 80s!

And as for financial careers, I can tell you that finance/investing is a great career for women, but there still aren’t enough women in higher-paying financial jobs. Some 52% of entry-level financial jobs are held by women. But according to the World Economic Forum, women hold just 22% of executive and 27% of senior management positions in companies worldwide with a market value of at least $2 billion.

Nevertheless, we are making strides!

Now, back to post-retirement careers. Here’s what Investopedia says are the Top 10 Careers for Women Over 50:

1. Real Estate Agent
2. Financial Advisor
3. Nurse
4. Occupational Therapist
5. Personal Trainer
6. Curriculum Developer
7. Freelance Writer
8. Tutor
9. Counselor
10. Personal Chef

Now that you know which jobs are attractive, the next question for older women is, how do you find a job?

The best way, of course, is to continue in the same job you are currently working, if you can work that out with your company. You may find that management will allow you to shift to a part-time position, or go from a full-time employee to consultant status, in which you would probably make more money but lose your benefits (but if you are over age 65, you won’t need their health insurance). I have several engineering friends who retired from a huge defense contractor and now work as consultants for the same company, getting a much larger paycheck! Negotiate!

Next, it’s never too late to go back to school to learn a new profession. A few years ago, one of my real estate clients graduated from law school at age 72! I think that is just wonderful. So, if you’ve always wanted to try a new field, now is the time to do so!

Don’t forget about your networks—friends, family, former colleagues, alumni, customers, etc.

Online job listing sites, such as LinkedIn, Indeed.com, and even social media sites that you frequent are filled with job opportunities.

Check out telecommuting/remote work. One of my relatives is 82 and answers calls for a cable provider from the comfort of her couch! And in the real estate field, it’s very common for virtual assistants to handle transactions without leaving their homes. My bookkeeper is semi-retired, and while I live in Tennessee, she resides in Florida.

Volunteer in a field in which you are interested. You never know; it could turn into a paying job!

Start your own business. This is sometimes a natural outgrowth of your pre-retirement job. This is very common in both of my fields. I have several Realtors and mortgage lenders who worked for companies for years and started their own businesses as they closed in on retirement age.

How to Value Your Job Worth

Whether you are just embarking on a career, or retiring and looking for other job opportunities, this section is for you!

Listen, women are known to undervalue our work. I couldn’t begin to count how many times I’ve heard women say, “You want me to do the work of three people for the same amount of money—sure!”

No. No. No. Just no.

This is not a personality fault. After all, most of us were reared by parents who taught us to be agreeable and put others’ needs before our own. “Don’t speak up—it’s not ladylike.” You’ll be seen as the B-word if you come across as demanding.

The world hasn’t changed that much since my mother preached those same values to me. But change is afoot—albeit slowly—and the time is perfect for you to create your own sense of value—right now. And learn to negotiate! There are tons of books, podcasts, and courses that will help you to fight for your value.

One of the best ideas I ever learned about negotiation is don’t appear too eager. The first person to speak is the loser. And a lot of women haven’t yet mastered that concept—because we want the job! We want to appear enthusiastic, which is fine. But don’t undercut yourself by being too agreeable. If you discount your services, you are devaluing your merit.

In the real estate business, I’m known for saying, “We are a full-service agency and not a discount brokerage.” That means we work hard for our compensation, and while others may offer a better deal, in those cases, I feel that you get what you pay for. Now, that doesn’t mean that we don’t offer a menu of services at varying price ranges, because we do. But if you want full service, which entails all the bells and whistles, you’ll pay for full service.

There are plenty of salary surveys around the internet. It’s worthwhile to review them just to make sure that the salary you are being offered is consistent with the industry average. Here’s a recent one by Lending Tree:

As you can see, the ranges can vary—a lot—and women tend to make less money for the same job than men.

Listen, salaries differ according to experience, professional barriers to entry, and demand for your particular type of expertise. But you need to realize that your value comes from your knowledge, skills, and provable results. So, don’t be shy about conveying what you bring to the table.

And negotiate up! If your potential employer insists on paying you less than what you think you are worth, you can say no. Or you can negotiate to get a raise after a few months of proving yourself. Just make sure you get that promise in writing!

Now that you have gained control of your spending and decided if retirement is for you or if you need extra income for retirement or other goals, it’s time to develop your saving/investing plan in detail.

Creating an Aggressive Saving/Investing Plan

Beginning investors have a lot of questions: How to get started, where to find attractive investments, how/where to purchase them, how and how often to monitor them, and when to sell them.

Each of these questions could warrant an article all their own, so this article won’t cover them in depth, but I will share some quick and simple ideas to get you started.

How to Get Started Investing

I recommend that beginning investors (and even experienced investors who want to diversify their portfolios) purchase exchange-traded funds (ETFs).

An ETF is a basket of investments that track a stock index, a commodity, bonds, or a diverse group of assets. They were created in 1993, and as of the end of 2023, there were 3,108 ETFs with $8.1 trillion in assets.

You can buy many ETFs that track the broader stock market indices, such as the Dow Jones Industrial Average, the S&P 500, the Nasdaq, and the Russell Indices. And you can also find hundreds of ETFs that focus on specific sectors such as Finance, Technology, Biotech, Utilities, etc.

But for the beginning investor, starting with the broader index ETFs is a great place to begin.

Later on, as your investing expertise grows, you may want to start investing in sector ETFs or in individual stocks. And a great way to get your feet wet would be to join or create an investment club of like-minded individuals—a fantastic way to learn about investing and to spread your investing risk among a group of investors.

I have started four different investment clubs—two co-ed, one for women only, and one for gifted children.

In a club, members invest a certain amount each month and pool their funds to buy stocks. If you are interested, betterinvesting.org is a great place to start. The site is chock full of all the materials and information you will need to begin and maintain your club, including an accounting software package and a monthly magazine that includes reams of information on investing education and sample portfolios.

My all-women investment club had the best returns of all my clubs. And for a good reason! According to research from Fidelity Investments, based on an analysis of annual performance for 5.2 million accounts, women investors tend to achieve positive returns and outperform men by 40 basis points!

How to Find Prospective ETFs

The internet has lots of free screeners to help you locate potential ETF investments. You’ll want to make sure that you screen for ETFs with good returns, low expense ratios, and low turnover.

You can find effective screeners at ETF Database, WisdomTree, Pensions&Investments, or Yahoo! Finance.

Most of the screeners will allow you to compare several ETFs. Just make sure you really look behind the flash and verify that the composition of the portfolio is attractive to you, the expenses are reasonable, and the returns are stellar!

How to Purchase ETFs

You can buy ETFs from any broker. But you will most likely have to pay a commission for buying and selling. However, with the advent of discount brokers several decades ago, commission prices have become pretty negligible.

Some of the top-rated brokers for buying ETFs can be found here.

How Often Should You Monitor Your Portfolio?

I recommend that you review your portfolio at least quarterly to make sure it is performing in line with your goals. I am a long-term investor, so just because an ETF doesn’t go up in price during a three-month period does not mean you want to sell it. However, if it declines three quarters in a row, you may want to investigate why and perhaps sell it to make room for a better-performing investment.

When Should You Sell an Investment?

There are several reasons why you might want to sell an investment, including:

1. As I mentioned above, when an investment is not performing as well as you would like, it may be time to cash in.
2. When you’ve made a tidy profit (for me, that’s 30% or more), and want to take some money off the table.
3. For tax reasons, if you do have an investment that is losing money, you may want to cash it in and take the losses to help you reduce your adjusted income.
4. You need the money.

ETFs to Buy Now

As you can see in the following table, large-cap ($10 - $200 billion market cap) stocks are outperforming the smaller ($250 million - $2 billion) and mid-sized ($2 - $10 billion) stocks. And that’s been the case for the past three years. However, in recent months, mid-caps and small caps are becoming more attractive.

You can easily add ETFs that represent all three of these market capitalizations by investing in some broad market ETFs such as the three I’ve outlined below:

I hope these ideas and recommendations will encourage you to take charge of your financial future—whatever age you may be. But remember, the younger you are, the greater potential you will have to learn from the mistakes some of us older women have made and to begin to earnestly and decisively build a portfolio that will create a profitable life for you and your family.