Cheryl Waters, 74, retired at age 70 with a healthy nest egg — no small feat, considering she had to start investing again after a divorce and some poor financial decisions left her retirement savings close to zero when she was in her 50s.
Rosem Morton for the Washington Post
Cheryl Waters, 74, was preparing for a trip to Puerto Rico to celebrate her wedding anniversary with her second husband when she took a step back to enjoy the moment.
“I never thought I’d be able to retire,” the former public school teacher said. “If someone had told me I was going to live like this, I wouldn’t have believed them.”
Waters retired at age 70 with a healthy nest egg — no small feat, considering she had to start investing again after a divorce and a few poor financial decisions left her retirement savings close to zero when she was in her fifties.
Her situation echoes that of many older women. According to a recent study by Fidelity Investments, two-thirds of women in the baby boomer generation began investing in their 50s or older.
These late starts, combined with the persistent gender pay gap over the course of a career, result in women having about 30% less retirement income than men, according to a 2020 Brookings Institution study. Women are also less likely to be employed in workplaces where a pension plan is offered.
Waters began his retirement by investing slowly, letting his employer-sponsored retirement account accumulate passively and without paying close attention. Then, after talking with an older colleague, she decided to take a more active stance and met with a financial planner recommended by that colleague.
Waters began by asking her what stocks she should sell to pay off her consumer debt. Rather than giving a specific answer, Waters said, the financial planner focused on the bigger picture and the need to continue increasing her income. His advice: “I should probably get a second job for a while. »
Cheryl Waters, 74, meets her French teacher, Stephanie Digby, via video chat. Thanks to his careful saving, Waters is planning a trip to Paris in a few months.
Rosem Morton for the Washington Post
Waters did just that, taking additional tutoring jobs for several years and applying for an interest-only mortgage, giving her extra money each month that she used to diversify her investment strategy . When she turned 66 1/2, she filed for Social Security but continued to work, using the excess cash to bolster her retirement accounts and start a 529 college savings plan for her little ones. -children.
His careful savings paid off. She’ll follow her trip to Puerto Rico with an excursion to Paris in a few months – and she’ll achieve one of her most important goals: “I’ll be able to leave money for my grandchildren.”
Watch out for the gap
Nick Booth, an independent financial planner who worked at one of Wall Street’s biggest firms, says he often encounters a “knowledge and confidence gap” between older and younger women who come to him. ask for advice. The former saved in a business account, but “as they get closer to retirement, they start to get a little more serious,” he said.
Another barrier Booth cites is that women are less likely to have access to wealth advisors, as these professionals typically receive a percentage of total assets under management – where higher-income men dominate. For example, the Wall Street firm where Booth previously worked only paid its advisors for work with clients with a minimum of $250,000 in assets — a threshold that later increased to $1 million.
Booth’s broader strategy with new clients is to start by asking what underlying decisions got them to where they are today. “I wish I had started sooner” is the most common regret, he says.
One of Booth’s clients, Marianne Nishifue, 66, had not planned to invest in the stock market as an independent consultant. But when she was in her 50s, her sister died in a car accident, leaving behind four young adult children.
Nishifue knew she needed a bigger financial cushion to care for her nieces and nephews. So she took a friend’s advice and started trading stock options. She found that her business background and penchant for in-depth research on companies complemented her intuitive talent for determining whether a stock was worth buying.
By understanding the business owner, she said, she can feel the “passion, clarity and vision” she would like to see before investing in that business.
However, over time, her foray into stock trading became stressful – “I was trying to start my own index fund,” she joked – so she turned to advice site Personal Finance Club and its affiliated tool Nectarine, an online fee database. only financial advisors. There she found Booth.
Over time, Nishifue says, her investing style has evolved: She now takes a more holistic view of her portfolio and avoids the emotional ups and downs linked to the performance of individual stocks.
No more “shame”
Lisa Croke, 50, also started investing late after her marriage ended seven years ago. With $20,000 in consumer debt, $70,000 in student loans, no savings, and very little knowledge of the basics of retirement planning, she decided she needed to build what she calls “her team “.
“I want to be a good example for my children,” she said.
The team included an accountant as well as a financial coach to help answer questions related to Croke’s first corporate job, like explaining what “employer matching” means and discussing options for high-yield savings accounts – two terms she was unfamiliar with.
With their help, she paid off her credit card debt — a journey she later detailed in a podcast with her financial coach.
Then, once Croke started having extra money to invest, she opened a Fidelity investment account as well as an account with Acorns, an app that aggregates a user’s daily transactions and automatically invests the difference. She describes the Acorns platform as a “non-threatening” way to start investing.
“I want to leave a legacy,” she said. “I’m going to do it in the world, and to do that, money is freedom, money is power.”
Croke also took to social media for her financial research, citing Tori Dunlap, known as @HerFirst100k, as someone who inspired her.
Croke says she’s come a long way since she began her journey a few years ago and is happy to be able to “decouple” her investment strategy from the guilt she once felt about not not understand money.
“I can talk to someone about finances,” she said. “I no longer have shame.”
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